PNB, Bank of Baroda Among 5 Banks Raising Lending Rates After RBI Hike

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For households, the immediate concern is a higher monthly payment when the loan resets. Extending repayment instead could keep the EMI broadly unchanged, but interest would run for longer. A bank’s announcement date does not automatically become every customer’s reset date. The timing and cost depend on the existing loan agreement.

How Will The Lending Rate Increase Affect Borrowers?

A borrower may see the same EMI leave the account even after the interest rate rises. The change could be in the number of instalments remaining. Looking only at the monthly debit would miss that longer commitment, particularly where a substantial loan balance is still unpaid.

PNB’s announcement does not change its Marginal Cost of Funds Based Lending Rate or Base Rate. Indian Overseas Bank has also retained its existing strategic and risk premiums until further review. Loans tied to other benchmarks do not necessarily receive the same increase under these announcements. 

What Does The Expert View Mean For Household Repayments?

“For borrowers, the effect will be gradual,” financial services executive Adhil Shetty said in comments published on 7 October 2026. The lender’s reset cycle determines when a revised rate reaches an existing account. For customers considering a balance transfer, any lower interest rate also needs to be weighed against processing fees and other transfer costs.

The view is that an unchanged EMI deserves a closer look after the reset. It may protect the monthly budget while pushing the final repayment further away. The useful comparison is the remaining interest payable under each repayment option. A loan EMI calculator⁠ can provide an estimate, while the bank’s revised schedule establishes the actual instalments. 

Which Banks Have Raised Their Lending Rates?

PNB and Indian Overseas Bank have published their revised figures on their official rate pages. For the remaining banks, announcements or reports dated 7 and 8 October 2026 record the revisions. The figures below are the banks’ lending benchmarks; individual applicants are not all offered loans at those rates.

A customer’s actual interest rate also includes the pricing terms applicable to that loan. The lowest benchmark in this table therefore does not establish which bank will offer the cheapest loan to a particular borrower.

What Have The Banks Said About Their Pricing?

PNB retained its 0.35% Bank Strategic Premium within the revised benchmark. Bank of India kept its markup at 2.85%, while Bank of Baroda’s remained at 2.65%. Their announcements distinguish the higher repo component from those unchanged additions.

Indian Overseas Bank’s official notice similarly states that its strategic and risk premiums will continue at their current levels until further review. The revision does not announce an increase in those premiums alongside the benchmark.

What Was The Position Before October?

PNB’s historical record shows its previous 8.10% benchmark from 6 December 2025. Indian Overseas Bank records its earlier 8.10% rate from 15 December 2025. The October revisions move both benchmarks above those December levels. 

Conclusion

Existing borrowers will find the revised EMI and remaining number of instalments in their updated repayment schedule. Those figures show whether they must pay more each month, repay for longer, or do both.

Frequently Asked Questions

1. Which Banks Have Increased Lending Rates?

PNB, Bank of India, Indian Bank, Bank of Baroda and Indian Overseas Bank have increased their repo-linked lending benchmarks.

2. Will Every Borrower’s EMI Increase Immediately?

No. The effect depends on the loan’s benchmark and reset terms. Some repayments may change through a longer tenure instead of a higher EMI.

3. Is PNB’s Revised Benchmark The Final Home-Loan Rate?

PNB’s benchmark is 8.35%. The rate charged on a particular home loan depends on the applicable spread and other pricing terms.

4. Should A Borrower Increase The EMI Rather Than Extend The Tenure?

A higher EMI can avoid extending repayment and reduce interest compared with a longer tenure at the same rate. Affordability remains a constraint.

5. How Can A Borrower Repay A Home Loan In Less Time?

Higher instalments or partial prepayments can shorten repayment. The lender’s calculation will show the revised tenure and any applicable charges.