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RBI Repo Rate Hike: Loans Get Costlier As Major Banks Increase Interest Rates
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CNBC Awaaz•07-10-2026, 21:29
RBI Repo Rate Hike: Loans Get Costlier As Major Banks Increase Interest Rates
- •Several banks including Bank of Baroda, Punjab National Bank, and Indian Bank have raised their repo-linked lending rates by 25 basis points following the RBI's repo rate hike to 5.50%.
- •The new interest rates take effect from October 8, directly impacting customers with floating-rate home loans, auto loans, and other external benchmark-linked loans.
- •The rate hike means borrowers could face higher monthly EMIs or extended loan tenures depending on their specific loan terms and remaining balance.
- •The RBI hiked the repo rate to tackle rising inflation pressures, with CPI inflation climbing to 4.8 percent in August and crude oil prices remaining volatile globally.
- •Despite inflation concerns, the Indian economy shows robust growth with the RBI raising its GDP growth forecast for the financial year to 7.1 percent.
Key Questions Answered
The Reserve Bank of India raised the repo rate by 25 basis points to 5.50% from the previous 5.25%.
Banks such as Bank of Baroda, Bank of India, Indian Bank, Indian Overseas Bank, Punjab National Bank, Karur Vysya Bank, and Tamilnad Mercantile Bank revised their external benchmark lending rates upward.
The RBI raised the repo rate due to challenging global environments, rising geopolitical tensions, volatile commodity prices, expensive crude oil, and mounting inflation pressures.
