Major Banks Revise Repo-Linked Lending Rates in October 2026, Impacting Home Loan Borrowers

Six major banks in India, including State Bank of India (SBI) and Punjab National Bank (PNB), have revised their repo-linked lending rates in October 2026. This move follows the Reserve Bank of India (RBI) hiking its benchmark repo rate by 25 basis points to 5.50% on October 7, 2026, announced at the culmination of the three-day Monetary Policy Committee (MPC) meeting. Consequently, loans linked to these benchmarks are poised to become potentially more expensive, affecting both existing and prospective home loan borrowers.

Prominent lending institutions such as State Bank of India (SBI), Punjab National Bank (PNB), Bank of India, Indian Bank, Bank of Baroda, and Canara Bank have all adjusted their respective lending benchmarks this October. Specifically, SBI increased its External Benchmark Linked Lending Rate (EBLR) from 7.90% to 8.15% (plus credit risk premium and benchmark spread), effective October 15, 2026, and its Repo Linked Lending Rate (RLLR) rose from 7.50% to 7.75% (plus CRP). PNB's RLLR increased from 8.10% to 8.35%, effective October 8, while Bank of India's RLLR also rose from 8.10% to 8.35%, effective October 7. Indian Bank saw its Repo-Based Lending Rate (RBLR) increase from 7.95% to 8.20%. Bank of Baroda's Benchmark Retail Loan Lending Rate (BRLLR) is now 8.15%, effective October 8, and Canara Bank's RLLR was revised to 8.25%, effective October 9.

For ordinary savers and taxpayers with home loans, an increase in a lending benchmark directly translates to higher interest rates on their loans. This can lead to either higher monthly instalments (EMIs) or a longer repayment period, depending on how their specific banking institution adjusts the loan terms. New borrowers and those applying for fresh home loans will also face increased borrowing costs from these revised rates. It is crucial for existing borrowers to contact their lending institution to confirm when the revised rate will apply and how it will impact their current loan.

While the revised benchmark is a significant factor, it is not necessarily the final interest rate a borrower pays, as it also depends on the lending institution's applicable spread and specific loan terms. Therefore, prospective borrowers should diligently check the latest rates and carefully review and compare the effective interest rate, processing charges, and repayment terms across different lending institutions. Having clarity on these aspects is essential for making informed and beneficial borrowing decisions, especially when considering a new loan or refinancing an existing one.

What to watch: Monitor future RBI Monetary Policy Committee meetings for further repo rate changes.

Editor's note: The draft effectively summarizes the bank rate revisions and the context of the RBI's repo rate hike based on the provided text.