lending rate

RBI stepped up its fight against inflation and persistently high credit growth by raising its short-term lending rate by 25 basis points for the second time this year.
The Reserve Bank of India (RBI), acting after local markets closed, lifted its repo rate to 7.75 percent, its highest in nearly 4-1/2 years, saying it was critical to take "demonstrable and determined action" to cool inflationary pressures.The central bank, which last raised the repo rate in January, said it was also increasing its cash reserve ratio, the proportion of cash banks have to keep with it on deposit, by half a percentage point to 6.5 percent.Annual inflation, as measured by wholesale prices is running at nearly 6.5 percent, which is well above the central bank's comfort zone of 5.0-5.5 percent, while bank lending is growing at about 30 percent year-on-year.