In the rising interest rate regime, both banks and their customers have started feeling the pain, although for different reasons.
Let’s talk about the customers first. The Reserve Bank of India (RBI) last week raised its policy rate by half a percentage point to 4.9 per cent. This is the second rate hike since May 4, when the Indian central bank had raised its policy rate by 40 basis points. One basis point is a hundredth of a percentage point. A series of rate hikes is set to follow to fight high inflation.
What does it mean for the customers?
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