RBI
Banks Raise Lending Rates After RBI's 25 bps Repo Hike
8 October 2026 · Business Today
The RBI raised the repo rate by 25 bps to 5.50% on October 7, its first hike in nearly four years, and switched its stance to 'calibrated tightening'. PNB, BoB, Indian Bank, BoI, IOB and Tamilnad Mercantile Bank have since raised their repo-linked lending rates by 25 bps, effective October 8.
Points to Remember
- RBI raised the repo rate by 25 bps to 5.50% on October 7 — the first hike in nearly four years.
- The six-member MPC voted unanimously for the hike; the stance was changed to 'calibrated tightening', ruling out near-term cuts.
- This was the first rate decision under Governor Sanjay Malhotra, who took office in December 2024.
- PNB raised its RLLR from 8.10% to 8.35%; BoB's RBLR rose from 7.90% to 8.15%; Indian Bank's RBLR from 7.95% to 8.20%.
- Tamilnad Mercantile Bank raised its RLLR from 8.25% to 8.50%; PNB's MCLR and Base Rate were left unchanged.
Why it matters
Repo-linked home, car and other loan EMIs are set to rise, so expect borrower queries on higher repayments and revised reset dates; those on MCLR or base-rate loans stay unaffected for now.
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