The monetary policy has reached at a time when the economy is witnessing its slowest growth rate in a decade. "If policy actions succeed in delivering the desired inflation outcome, real GDP growth can be expected to firm up from a little below 5 percent in 2013-14 to a range of 5 to 6 percent in 2014-15," Rajan said.

According to an SBI official, in the latest bank's asset-liability committee meet, it has been decided that all interest rates including home loans, will remain unchanged. "I do not see anyone hiking interest rates as a result of this 25bps (or a quarter of a percentage point) hike in repo rate. I think interest rates have peaked," said Deepak Parekh, chairman, HDFC.

The company's Vice Chairman and CEO, Keki Mistry, said that there was no plan to increase deposit rates, which would mean that there is no pressure on costs, thus reducing the likelihood of lending rates rising. Chanda Kochhar, MD & CEO of ICICI Bank, said her bank would take a decision on home loan rates when the present scheme offering discounted rates ends in January.

According to K R Kamath, chairman of Punjab National Bank and head of the Indian Banks' Association, lenders would have to think twice before increasing lending rates because such a move would put further pressure on borrowers who are already stressed, thereby increasing the risk of defaults.

Read More:

Foreign Portfolio Investors To Have Uniform Tax Rate

Withdrawal Of Pre-2005 Notes Is Not To Check Black Money: Raghuram Rajan