Mumbai, April 21: Banks are beginning to raise interest rates in select segments — a sure sign that other loans could also turn expensive in the days ahead.

ICICI Bank has raised its interest rate on auto loans by 75 basis points, while some public sector banks are planning to raise interest rates on sub-PLR (prime lending rate) loans.

Sources from India’s second largest bank said interest rates had been raised between 50 and 75 basis points for certain segments of auto loans.

These are effective from the first week of April.

Auto loans prior to the hike were in the range of 13.5-14 per cent.

Although ICICI Bank has refrained from touching any of its other rates after the RBI announcement, officials from the bank have indicated that it would be done only if the cost of funds go up.

A couple of nationalised banks that include Union Bank of India and Indian Overseas Bank are learnt to be close to raising their sub-PLR loans by 25-50 basis points.

Currently, these loans are available at around three percentage points below a bank’s prime lending rate, and a hike will reduce the margin.