State-owned Bank of India (BoI) has announced a hike in lending rate by 10 basis points, a move which will make loans, including retail, expensive. The lending rate increase comes ahead of the monetary policy announcement by the Reserve Bank of India on April 5. The new rate would be effective from April 1, BoI said in a regulatory filing on Saturday.

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The bank has increased the mark-up by 10 bps from the existing level of 2.75 per cent to 2.85 per cent, and with the present repo rate of 6.5 per cent, the repo-based lending rate (RBLR) will be 9.35 per cent, it said.

Meanwhile, in a separate filing, another public sector lender Indian Bank has hiked the lending rate linked to base rate and Benchmark Prime Lending Rate by 5 basis points. The new rates are effective from April 3 in the case of the Indian Bank.