Bank of India Raises Repo-Linked Lending Rate to 8.35% After RBI Rate Hike: What Borrowers Should Know

Bank of India has raised its Repo Based Lending Rate (RBLR) by 25 basis points to 8.35%, following the Reserve Bank of India’s decision to increase the policy repo rate to 5.50%.

The revised Bank of India lending rate took effect on October 7, 2026, according to the bank’s regulatory disclosure. The move comes shortly after the RBI Monetary Policy Committee raised the repo rate by 25 basis points from 5.25% to 5.50%.

Bank of India RBLR rises to 8.35%

Before the latest change, Bank of India’s RBLR stood at 8.10%. The bank has now increased it to 8.35%, matching the 25-basis-point increase in the RBI’s repo rate.

The repo-linked component of the rate has moved from 5.25% to 5.50%, while the bank’s 2.85% markup remains unchanged.

The revision means borrowers whose loans are linked to Bank of India’s repo-based benchmark could see their borrowing costs rise, depending on the terms of their individual loan agreements.

What does the RBI rate hike mean?

The RBI increased the repo rate by 25 basis points to 5.50% on Wednesday, marking its first repo-rate increase since February 2023. The central bank also shifted its monetary policy stance from “neutral” to “calibrated tightening.”

The repo rate is the rate at which the RBI lends short-term funds to banks. When this benchmark rises, loans linked directly to external benchmarks can become more expensive.

For Bank of India customers with eligible floating-rate loans, the impact will depend on whether their loan is linked to the RBLR and on the reset mechanism specified in their loan agreement.

Will EMIs increase?

A higher benchmark rate can lead to higher interest costs for borrowers with floating-rate loans. Depending on the lender’s reset rules, the effect may appear through a higher EMI, a longer repayment period, or a combination of both.

The impact will not necessarily be identical for every borrower because loan spreads, outstanding principal, remaining tenure and reset dates can differ.

Borrowers with fixed-rate loans generally do not face an immediate change in their contracted interest rate solely because the RBI raises the repo rate.

Home, vehicle and personal loans

The RBI’s regulatory framework requires banks to link floating-rate retail and MSME loans to external benchmarks, with the policy repo rate being one permitted benchmark. Such loans are therefore more directly exposed to changes in the central bank’s policy rate.

Borrowers should check their latest loan statement or contact Bank of India to confirm their applicable benchmark, spread, revised interest rate and next reset date.

Why the move matters

The Bank of India rate revision is an immediate example of how an RBI policy-rate change can pass through to bank lending rates.

The RBI’s decision comes amid concerns over inflation and other economic pressures. The central bank has also raised its FY27 growth projection while adopting a tighter policy stance.

For borrowers, the key takeaway is that the cost of borrowing may rise for loans directly linked to the revised benchmark. Existing customers should therefore check how the new RBLR affects their particular loan rather than assuming that every Bank of India loan will see the same change.