Private sector Karur Vysya Bank announced a hike in benchmark lending rate by 0.15 percent to 7.75 percent even as the Reserve Bank left its key interest rates unchanged for the third straight meeting. The new rate would be effective from August 14, Karur Vysya Bank said in a regulatory filing. The External Benchmark Rate - Repo linked (EBR-R) of the bank would be revised from 9.60 percent to 9.75 percent, it said.

The Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.50 percent with preparedness to act should the situation so warrant, Reserve Bank of India Governor Shaktikanta Das said earlier in the day.

"Further, with the monetary transmission still underway and headline inflation remaining higher than the 4 percent target, the MPC decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth," he said.