12 Nov 2026
The Reserve Bank of India raised its policy repo rate by 25 basis points to 5.50 per cent on 7 October 2026. If your loan rate is linked to the repo rate, your lender may pass the increase on to you at your next rate reset. The exact date and size of the change are in your loan agreement and your lender's notice to you. This note was published on 8 November 2026 and covers the most recent policy decision before that date.
What the RBI decided
On 7 October 2026 the Monetary Policy Committee (MPC) published its resolution after a meeting held from 5 to 7 October. You can read it on the RBI website. The key points are below.
Key decisions in the MPC resolution of 7 October 2026
| Item | Decision |
|---|---|
| Policy repo rate | Raised by 25 basis points to 5.50 per cent |
| Standing Deposit Facility rate | 5.25 per cent |
| Marginal Standing Facility rate and Bank Rate | 5.75 per cent |
| Stance | Changed to calibrated tightening |
| Vote on the rate | Unanimous |
| Vote on the stance | Two members preferred to keep the stance neutral |
The resolution also states the MPC's projections for 2026-27: real GDP growth of 7.1 per cent and CPI inflation of 5.2 per cent. A basis point is one hundredth of a percentage point, so 25 basis points is a quarter of a percentage point.
Why the repo rate matters to a borrower
The repo rate is the rate at which the RBI lends to banks. Many floating-rate loans are priced as an external benchmark lending rate (EBLR), which is a benchmark such as the repo rate plus a spread set by the lender. When the benchmark moves, the loan rate can move with it. Read the glossary entry on EBLR and our guide on repo rate, EBLR and MCLR for the full picture.
What the change means depends on how your loan is priced.
How the repo rate decision can affect different loans
| Your loan | What can happen | What to check |
|---|---|---|
| Floating rate linked to the repo rate (EBLR) | Your rate can rise by the amount of the benchmark change, after your next reset date | The reset date and the spread in your sanction letter |
| Floating rate linked to another benchmark | The effect may be slower or smaller | Which benchmark your lender uses and how often it resets |
| Fixed rate | Your rate and EMI stay as agreed for the fixed period | When the fixed period ends |
| New loan you are planning | Offers from lenders may be priced against the new benchmark | The APR and Key Fact Statement of each offer |
What this means for you
- If you have a repo-linked home loan or another floating-rate loan, expect your lender to tell you of any change. Ask the lender when your rate resets.
- Your lender may raise your EMI, or keep your EMI and extend your tenure. Ask which one applies to you, and what it does to the total interest you pay.
- Use the EMI calculator to see how a rise in rate changes your EMI and your remaining tenure.
- A part-payment, where your lender allows it, can reduce the principal on which interest is charged. Ask your lender about any charge before you pay.
- If you are about to borrow, compare offers on the APR, which includes fees and not just the interest rate. See our guide on the Key Fact Statement and APR.
- For current lender rates, see the interest rates page. Rates there are set by lenders and change.
What to avoid
Do not assume that every lender passes on a change on the same day. Each loan has its own reset date. Do not ignore a notice from your lender: check that the new EMI or tenure matches what the notice says. If you think the lender has applied the change wrongly, write to the lender first and use its grievance process. You can then take the matter to the RBI complaint portal, as described on our grievance page.
What the stance change signals
The MPC changed its stance to calibrated tightening. The RBI does not promise future decisions, and the next MPC meeting will decide on the evidence at that time. Plan your budget with a margin for your EMI to rise rather than rely on a forecast.
Related reading: EMI calculator, Key Fact Statement and APR, interest rates page.
Sources
- Reserve Bank of India, Monetary Policy Statement 2026-27: Resolution of the Monetary Policy Committee, 5 to 7 October 2026, dated 7 October 2026, rbi.org.in (link in the text above).
- This note explains a public announcement in general terms. It is not advice on your own loan. Check your loan agreement or ask your lender.