Several major banks have raised their lending rates following the Reserve Bank of India’s decision to increase the benchmark repo rate by 25 basis points to 5.50%. Punjab National Bank, Indian Bank and Bank of Baroda have announced higher lending rates, increasing borrowing costs for customers. Other banks are also expected to revise their benchmark lending rates in the coming days. The RBI’s six-member Monetary Policy Committee unanimously approved the rate hike, marking the first repo rate increase in nearly four years. The central bank also shifted its stance to “calibrated tightening,” indicating that further rate increases could be considered depending on inflation and economic conditions. Tamilnad Mercantile Bank has already raised its Repo Linked Lending Rate (RLLR) from 8.25% to 8.50%. The increase in lending rates could raise monthly repayments for borrowers with floating-rate home loans and other loans. The RBI’s decision comes amid concerns over inflation, global interest rates and pressure on the Indian rupee.
RBI Rate Hike Prompts Several Banks to Raise Lending Rates
Oct 08 2026
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