PNB to Bank of Baroda: 5 Banks Raise Lending Rates After RBI Rate Hike

Punjab National Bank, Bank of India, Indian Bank, Bank of Baroda and Indian Overseas Bank have raised repo-linked lending rates after the RBI’s 25-basis-point hike.

By All India Story

8 Oct 2026, 3:16 PM IST 2 min read

Bank buildings representing higher lending rates after the RBI repo rate hike — Banks have raised repo-linked lending rates following the RBI’s latest 25-basis-point repo rate hike.

The RBI rate hike lending rates impact is already being felt by borrowers, with several major banks increasing their benchmark lending rates shortly after the Reserve Bank of India raised the repo rate by 25 basis points to 5.50% on October 7.

Punjab National Bank (PNB), Bank of India (BoI), Indian Bank, Bank of Baroda (BoB) and Indian Overseas Bank (IOB) have announced increases in their repo-linked lending rates.

PNB raised its Repo Linked Lending Rate (RLLR) from 8.10% to 8.35%, effective October 8. The revised rate includes a Bank Strategic Premium of 0.35%. The bank has kept its Marginal Cost of Lending Rate and Base Rate unchanged.

Bank of India increased its Repo Based Lending Rate (RBLR) from 8.10% to 8.35%, effective October 7. Its filing showed that the repo component moved from 5.25% to 5.50%, while the markup remained at 2.85%.

Indian Bank, BoB and IOB Also Raise Rates

Indian Bank increased its Repo Linked Benchmark Lending Rate from 7.95% to 8.20%. The revised rate applies from October 8 until the next review.

Bank of Baroda raised its Baroda Repo Based Lending Rate (BRLLR) by 25 basis points, from 7.90% to 8.15%, effective October 8. The bank’s repo component increased to 5.50%, while its markup remained unchanged at 2.65%.

Indian Overseas Bank also increased its Repo Linked Lending Rate from 8.10% to 8.35%, with the new rate effective October 8. It will remain applicable until further review.

What the Rate Hike Means for Borrowers

The higher benchmark rates could increase borrowing costs, particularly for customers whose loans are linked to external benchmarks such as the RBI repo rate.

Existing floating-rate borrowers may see their interest rates rise as banks transmit the policy rate increase. Depending on the loan structure and the lender’s method of passing on the increase, borrowers could face higher EMIs, a longer repayment period or a combination of both.

For new borrowers, the increase could translate into higher overall interest costs on loans.

The latest revisions also indicate that other lenders could review their benchmark lending rates following the RBI’s repo rate decision. The actual impact on individual borrowers will depend on the type of loan, benchmark and terms applicable to their account.