Home, auto and corporate loans are likely to cost more, with the Reserve Bank raising key policy rates by half a percentage point, bankers said today.

“I think banks do not have any other option but to increase rates. It could be 25 basis points or 50 basis points, depending on individual banks,” IDBI Bank Executive Director R K Bansal told PTI.

Since the cost of funds has gone up, the banks would have to review their rates, he said.

Oriental Bank of Commerce Executive Director S C Sinha also said the repo rate hike of 50 basis points will definitely have an impact on interest rates.

Rates are likely to go up and a decision to this effect will be taken in the ALCO (asset liability committee) of the banks in the next few days, Sinha said.

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