IDBI Bank hiked deposit and lending rates by up to 50 basis points, hours after the RBI announced a slew of measures to tighten the monetary policy.
The bank also raised rates on high value housing loans in response to the RBI action to tighten norms for these advances.
However, other bankers said they will not raise interest rates immediately.
Interest rates on deposits across various maturities have been raised by 10-50 basis points, a senior IDBI Bank official said.
At the same time, the Benchmark Prime Lending Rate (BPLR) has gone up by 25 basis points, he said.
The hike in BPLR would result in an at least 25 basis points increase in housing, car and corporate loans for existing customers.
The bank has also raised the interest rate on high-value home loans of Rs 75 lakh and above by 25 basis points following the RBI's move to raise risk weight on these loans.
The RBI's move implies that banks will have to keep aside more money to offer home loans of Rs 75 lakh and above.
All the new rates will be effective from November 4, the official added.
The RBI hiked key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect to combat high inflation.
The short-term lending (repo) rate was increased to 6.25 per cent and the borrowing (reverse repo) rate to 5.25 per cent.
According to ICICI Bank Managing Director Chanda Kochhar, "There will be no immediate increase in interest rates after the (RBI) rate hike... There is an upward bias on interest rates which is due to a combination of many things, not just the (RBI) rate hike."
State Bank of India Chairman O P Bhatt had a similar view, asserting it will take two to three months for the Reserve Bank rate hike to get reflected in interest rates.
First, the deposit rates will be hiked, following which lending rates will go up, he said.
The transmission mechanism between the RBI and rest of the financial system does not work very fast, the SBI chairman said. It always works with a time lag, he said.
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