Major Indian banks raise lending rates following RBI policy shift

Several major banks have raised their external benchmark lending rates in the wake of recent monetary policy adjustments by the Reserve Bank of India. The increases are expected to translate into higher equated monthly installments (EMIs) for borrowers with floating-rate home loans, auto loans and other credit products linked to benchmark rates.

Public sector banks including Punjab National Bank, Bank of India and Bank of Baroda have announced rate hikes on their repo-linked lending rates, reflecting the broader market response to RBI actions. These adjustments typically flow through to customers within days or weeks of announcement, depending on individual bank policies and loan agreement terms.

Floating-rate borrowers are particularly affected by such changes, as their EMIs adjust periodically based on movements in the underlying benchmark rate. Customers with fixed-rate loans remain insulated from immediate increases, though banks may adjust rates on renewal. The quantum of individual EMI increases depends on the outstanding loan balance, remaining tenure and the specific rate hike announced by each lender.

Borrowers holding loans indexed to the Marginal Cost of Funds Based Lending Rate (MCLR) or repo rate should review their loan documents and contact their banks for precise information on how the rate changes will impact their monthly obligations. Many banks provide online calculators to help customers estimate the revised EMI amounts based on new lending rates.