Mumbai, May 3 (PTI) Home, auto and other loans are set to become costlier with the Reserve Bank today hiking key short-term rates to contain inflation, while giving relief to small savers by increasing the savings bank rate to 4 per cent from 3.5 per cent now.
The signal was given by the RBI in its annual policy review meeting for 2011-12, where it hiked the repo rate (the rate at which banks borrow from the RBI) by 50 basis points to 7.25 per cent, the ninth increase since March, 2010.
RBI Governor D Subbarao made it clear that containing inflation would take precedence over growth, which has been pegged at a lower level of 8 per cent for 2011-12 as against the government's projection of 9 per cent.