Impact of RBIs Repo Rate Hike Seen as Banks Raise Loan Interest Rates
Following the RBIs repo rate increase, major banks have raised their lending rates, making loans more expensive for consumers.
New Delhi, November 11 (Daily Kiran) : The recent increase in the Reserve Bank of India’s (RBI) repo rate by 25 basis points has prompted both public and private sector banks in India to raise their Marginal Cost of Funds Based Lending Rates (MCLR). Notable banks such as HDFC Bank, State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda are among those adjusting their lending rates.
MCLR represents the minimum interest rate at which banks can lend to their customers. An increase in this rate translates to higher costs for borrowers. SBI, the largest bank in the country, was the first to announce an MCLR hike, raising rates by 15 basis points for terms of three months, six months, one year, two years, and three years. This adjustment took effect on October 15.
PNB has increased its MCLR by 10 basis points across all terms, from overnight to three years. Similarly, Bank of India has also raised its MCLR by 10 basis points for three months, six months, one year, and three years, with new rates effective from November 1.
HDFC Bank, the largest private sector bank, has raised its MCLR by 5 to 15 basis points across all seven tenors, with the new rates effective from November 7. Canara Bank has also increased its MCLR by 10 basis points for all periods. Meanwhile, Bank of Baroda has raised its MCLR by 5 to 20 basis points for one month, three months, six months, and one year, with the new rates set to take effect on November 12.
In October, the RBI had announced a decision by its Monetary Policy Committee (MPC) to increase the repo rate to 5.50 percent. This followed a series of rate cuts totaling 125 basis points between February and December of 2025.
