# Banks pass on the repo hike: repo-linked lending rates up 25 bps from 8 Oct 2026

> After the RBI raised the policy repo rate (the RBI rate banks follow) to 5.50% on 7 October 2026, public-sector banks began filing matching increases. Bank of Baroda’s repo-based lending rate went from 7.90% to 8.15%, and PNB’s and Indian Overseas Bank’s repo-linked lending rates from 8.10% to 8.35%, all effective 8 October 2026. If your LAP, CC/OD or home loan is priced on one of these benchmarks, the higher rate applies from your next reset date. The spread on your sanction letter usually stays the same.

Source: https://jrloanadvisors.com/news/banks-pass-on-repo-hike-rllr-october-2026/ · Author: CA Jitendraa Rathi (CA membership number 217936), JR Loan Advisors · Updated 15 Oct 2026

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## What changed (official filings)

The RBI Monetary Policy Committee raised the policy repo rate by 25 basis points to **5.50%** on **7 October 2026** ([RBI resolution](https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63742); our note: [RBI MPC October 2026](/news/rbi-mpc-october-2026-repo-rate-watch/)). Within a day, listed banks informed the stock exchanges of matching increases to their repo-linked benchmarks:

| Bank | Benchmark | Old | New | Effective | Official intimation |
|---|---|---|---|---|---|
| Bank of Baroda | BRLLR (repo 5.50% + mark-up 2.65%) | 7.90% | 8.15% | 8 Oct 2026 | [Exchange filing](https://financialfilings.com/filings/bank-of-baroda/interest-rate-updatenotice/2026/66684069/) |
| Indian Overseas Bank | RLLR | 8.10% | 8.35% | 8 Oct 2026 | [Exchange filing](https://financialfilings.com/filings/indian-overseas-bank/interest-rate-updatenotice/2026/66677055/) |
| Punjab National Bank | RLLR (incl. 0.35% business strategic premium) | 8.10% | 8.35% | 8 Oct 2026 | [Report of PNB exchange intimation, 7 Oct 2026](https://www.psuconnect.in/bank-news/pnb-hikes-repo-linked-lending-rate-to-8-35-from-8-october) |

PNB said its MCLR and base rate were unchanged. Filings checked 13 Oct 2026. Rates change, so confirm on your lender’s own notice before you act.

> **Update, 15 Oct 2026:** SBI raised its external benchmark lending rate to 8.15% + CRP + BSP (from 7.90% + CRP + BSP), its RLLR to 7.75% + CRP and its one-year MCLR from 8.70% to 8.85%, effective 15 October 2026 ([SBI EBLR](https://sbi.bank.in/web/interest-rates/external-benchmark-based-lending-rate), [SBI MCLR](https://sbi.bank.in/web/interest-rates/interest-rates/mclr)). SBI LAP loans priced on one-year MCLR will move at their next reset. **Rates verified on 27 October 2026.**

## What it means for a ₹5 Cr+ borrower

- **Benchmark up, spread usually the same.** Your rate is the benchmark plus the spread fixed at sanction. A 25 bps benchmark rise means your rate goes up 25 bps from the **next reset date** in your agreement. The spread doesn’t change unless the lender re-prices it.
- **LAP and term loans:** most lenders keep the EMI the same and extend the tenure, unless your Key Fact Statement says otherwise.
- **CC/OD limits:** you pay interest on what you draw. A limit that is drawn close to full feels the increase every month. Interest servicing also goes into the bank’s review at your next renewal.
- **MCLR-linked loans** don’t move yet. They change only after the lender revises MCLR and your reset date arrives.

### Worked example (illustrative numbers)

*Illustrative only, not a quote.* Take a ₹10 crore LAP over 15 years at 9.50%, priced on a repo-linked rate. The EMI is about ₹10,44,225. At 9.75%:

- **If the EMI is raised:** about ₹10,59,363 a month (around ₹15,000 more).
- **If the EMI stays the same and the tenure is extended:** roughly 6 more months of EMIs (about 186 instead of 180, assuming the full tenure is still left).

On a ₹10 crore CC limit drawn at ₹8 crore on average, 25 bps adds roughly ₹2,00,000 a year in interest (₹8 Cr × 0.25%).

## What to do now

1. **Find your benchmark.** Your sanction letter or Key Fact Statement shows whether your loan is priced on RLLR/EBLR, MCLR or T-bill, and what the spread is.
2. **Note your reset date.** Ask the bank in writing for the date of the next reset, and whether it will change the EMI or the tenure.
3. **Look at the tenure, not just the EMI.** Several rate rises can quietly lengthen a LAP well past what you planned. You can ask the bank to raise the EMI instead.
4. **Use your working-capital renewal.** If your CC/OD renewal is within six months, prepare to negotiate the spread. Start with a [renewal and compliance review](/services/working-capital-renewal-compliance/).
5. **Compare before you switch.** Look at the spread, the costs and how long you will keep the loan. See [balance transfer and top-up](/services/balance-transfer-top-up/).

## Need a second look at your terms?

We read your loan terms and compare options for [loan against property](/services/loan-against-property/), [working capital](/services/working-capital/), LRD and [warehouse rental loans](/services/warehouse-rental-loan/) of ₹5 crore and above. If your property is in Chennai, see [loan against property in Chennai](/loan-against-property-chennai/). The bank decides the loan. [Contact JR Loan Advisors](/contact/) to review your file.

*Review date: 13 Nov 2026 (we recheck rates and sources monthly).*

## Frequently asked questions

### Which banks have raised repo-linked lending rates after the October 2026 repo hike?

Stock-exchange filings show Bank of Baroda (BRLLR 7.90% → 8.15%), Punjab National Bank (RLLR 8.10% → 8.35%) and Indian Overseas Bank (RLLR 8.10% → 8.35%), all effective 8 October 2026. Other lenders were also reported to have moved. Check your own lender’s notice for the rate that applies to you.

### My loan is linked to MCLR (a bank lending rate), not the repo rate. Does this change my rate now?

Not directly. PNB said its MCLR and base rate were unchanged. MCLR-linked loans reset only when the lender revises MCLR and your reset date (often yearly) arrives. Ask your lender for both dates in writing.

### Should I switch banks or refinance because of this?

Only if the all-in numbers work: the spread you would get, processing and legal costs, any foreclosure charges, and how long you will keep the loan. For ₹5 Cr+ LAP and working-capital limits, renegotiating the spread at renewal is often worth trying before a [balance transfer](/services/balance-transfer-top-up/).

## Discuss a ₹5 Cr+ loan

Send your papers for a free first look (₹5 crore to ₹250 crore). This is not a loan approval. **[Discuss a ₹5 Cr+ loan](https://jrloanadvisors.com/contact/#enquiry)** · WhatsApp +91 94450 93336 (https://wa.me/919445093336) · Call +91 94450 93336 · [Enquiry form](https://jrloanadvisors.com/contact/#enquiry). Loans of ₹5 crore and above. You may pay us a fee. We tell you the amount in writing before we start.

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JR Loan Advisors — loan help for borrowers, Chennai & Tamil Nadu. Phone/WhatsApp +91 94450 93336 · jitendraa@jrloanadvisors.com · https://jrloanadvisors.com/