In a release, chamber president Dr Jegatheesan said the RBI on Friday increased the repo rate from 5.40% to 5.90%.
And with major central banks' aggressive rate tightening taking the global economy on a white-kunckle ride, India's real GDP growth rate is pared down to 7% for FY23 from 7.2% projected earlier.
With the increase in lending rate, EMIs will go up for those borrowers who have availed loans on MCLR, EBLR or RLLR.
ICICI Bank and Punjab National Bank have already raised their lending rates after the central bank increased the benchmark interest rate on Friday.
In highest hike since 2019, RBI raises key rate by 50 bps to 5.40 per cent; Governor Shaktikanta Das raises inflation fears
The RBI expects growth in the first quarter of the current fiscal at 16.2 per cent, which will eventually taper to 4 per cent. Das cautioned that there are risks from the ongoing Russia-Ukraine war.
The Reserve Bank of India raised inflation forecast and changed its policy stance to withdrawal of accommodation from remaining accommodative.
The six-member Monetary Policy Committee, which met from May 6-to 8, unanimously voted to increase the policy repo rate to 4.90 per cent.
Announcing the credit policy, RBI Governor Shaktikanta Das said that the Indian economy is resilient, though negative global spillovers continue to weigh on the domestic economic growth outlook.
Builders welcomed the RBI's decision to increase the existing limits on individual housing loans by co-operative banks.
Monetary, fiscal authorities taking steps to control inflation: Economic Affairs secretary Ajay Seth
Seth said that apart from growth and inflation, the authorities are also working on management of rupee and keeping fiscal balance.
The governor said that the RBI has changed the policy stance to drop the phrase 'remains accommodative' and instead opted for 'withdrawal of accommodation' for guiding its future moves.
At present, UPI facilitates transactions by linking savings or current accounts through users’ debit cards. With this new proposal, users can link their credit cards with UPI.
When interest rates go up, the interest burden of a home loan borrower would go up, and this needs to be compensated either by way of an increase in the tenure of the loan or an increase in the EMI.
Realty, auto, bank stocks tumble after RBI's rate hike as experts predict quick actions against inflation
The 30-share BSE benchmark Sensex tumbled 1,306.96 points or 2.29 per cent to settle at 55,669.03. During the day, it plummeted 1,474.39 points or 2.58 per cent to 55,501.60.
While RBI decided to maintain status quo, it raised inflation forecast to 5.7 per cent for the current fiscal, up from its 4.5 per cent estimate in February.
Retail inflation surged to 6.95 per cent on yearly basis in March 2022 as compared to 6.07 per cent in February 2022 mainly on account of spiralling food prices.
Lenders believe that the neutral stance adopted by the RBI shows it's willingness to be accommodative with uncertainty over global growth.
The central bank has also projected inflation to be in the range of 5.1-5.6 per cent in the first half of 2018-19.
The 30-share index, which had bounced over 470 points in the opening trade, was quoting 68.63 points, or 0.20 per cent lower at 34,127.31 soon after the RBI announced its sixth bi-monthly review.