Higher EMIs ahead: PNB, Bank of India, Bank of Baroda and Indian Bank raise lending rates; check details

The Reserve Bank of India (RBI) raised the repo rate by 25 basis points from 5.25% to 5.50% in its latest monetary policy committee meeting on Wednesday. Following the repo rate hike, several banks, including Punjab National Bank (PNB) and Bank of Baroda (BoB), have revised their repo rate-linked lending rates.

The change in repo rate-linked lending rates, RRLR, or in some cases RBLR, means that borrowers with loans linked to the repo rate may see an increase in their loan’s equated monthly instalments (EMIs).

Punjab National Bank repo rate-linked loan interest rate

Punjab National Bank (PNB) has increased its RRLR from 8.10% to 8.35%, effective October 8, 2026.


The bank's earlier rate was 8.10%. Following the latest revision, the rate has been increased by 25 bps to 8.35%.

Bank of India repo rate-based loan interest rate

Bank of India has also revised its repo rate-based lending rate (RBLR) following the RBI repo rate hike.

Earlier, Bank of India was offering a rate of 8.10%. It has revised the rate to 8.35% with effect from October 7, 2026.

Indian Bank repo rate-linked loan interest rate

Indian Bank has revised its RBLR following the RBI's decision.

The bank has increased its RBLR from 7.95% to 8.20%.

Bank of Baroda repo rate-linked loan interest rate

Bank of Baroda has also revised its lending benchmark following the RBI repo rate increase.

For retail loans, the applicable BRLLR is now 8.15% with effect from October 8, 2026.

According to the bank's rate structure, the BRLLR comprises the current RBI repo rate of 5.50% and a mark-up/base spread of 2.65%.

Bank	Earlier lending rate	Revised lending rate	Effective from	Increase
Punjab National Bank (PNB)	8.10%	8.35%	October 8, 2026	25 bps
Bank of India	8.10%	8.35%	October 7, 2026	25 bps
Indian Bank	7.95%	8.20%	October 2026	25 bps
Bank of Baroda	7.90%	8.15%	October 8, 2026	25bps

What the RBI repo rate hike means for borrowers

The repo rate is the rate at which the RBI lends money to banks.

The repo rate impacts home loan rates since it is the rate at which banks borrow money from the central bank. When the RBI increases the repo rate, banks get loans from it at a higher rate. Since banks spend more money on these high-rate loans, they transfer the increased costs to their borrowers by increasing interest rates on loans.

What should home loan borrowers do after the interest rate hike?

Adhil Shetty, CEO, Bankbazaar, said, "For home loan borrowers, this will show up as a higher EMI or a longer tenure, depending on the lender.”

Shetty says that with the RBI saying cuts are off the table and the next step can only be a hike or a pause, borrowers should not plan around lower EMIs. "Many lenders extend the tenure to keep the EMI unchanged, which feels easier but costs more over time. Asking your lender how the change will be applied, and making a small prepayment each year can help limit the extra interest."

With PNB, Bank of India, Indian Bank and Bank of Baroda already announcing revisions, more banks may update their lending rates in the coming days.