Several major banks have increased their MCLR rates, potentially raising borrowing costs for some customers. Seven lenders, including SBI, HDFC Bank, PNB and Bank of Baroda, have revised their lending benchmarks in October and November 2026.
The revisions follow the Reserve Bank of India's (RBI) decision to increase the policy repo rate by 25 basis points to 5.50% in October. This was the central bank's first rate hike since February 2023. The RBI also shifted its monetary policy stance to calibrated tightening.
SBI increased its MCLR by 15 basis points across select tenures, effective October 15. HDFC Bank raised rates by 5–15 basis points across all seven tenures, effective November 7.
Among public sector lenders, PNB increased its MCLR by 10 basis points across all six tenures from November 1. Bank of India also raised rates by 10 basis points on select maturities. Indian Bank implemented a similar 10-basis-point increase across five tenures from November 3.
Canara Bank and Bank of Baroda have announced further revisions effective November 12. Canara Bank will raise rates by 10 basis points across all seven tenures, while Bank of Baroda's increases range from 5 to 20 basis points on select maturities.
Key highlights:
- Seven major banks, including SBI, HDFC Bank and PNB, have revised their MCLR rates following the RBI's October repo rate hike.
- The increases range from 5 to 20 basis points, depending on the bank and loan tenure.
- Several lenders have also raised fixed deposit rates on select maturities, offering higher returns to depositors.
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RBI's Rate Hike Reverses Earlier Easing Cycle
The latest MCLR rates revisions mark a shift from the easing cycle witnessed in 2025. The RBI reduced the repo rate by a cumulative 125 basis points between February and December 2025, bringing it down from 6.50% to 5.25%.
The October 2026 increase has reversed part of that reduction. Changes in the repo rate influence banks' funding costs. However, their transmission to lending rates depends on deposit costs, liquidity and funding requirements.
MCLR is an internal benchmark that banks use to determine lending rates for eligible loans. Existing borrowers may not see an immediate EMI increase, as the impact depends on their loan's benchmark and reset date.
Banks Also Revise Fixed Deposit Rates
Alongside lending benchmarks, several banks have increased fixed deposit (FD) rates on select maturities.
HDFC Bank revised its FD rates from November 4, with general customers earning up to 6.60% and senior citizens up to 7.20% on eligible deposits. PNB's revised rates, effective November 5, offer up to 6.80% to general customers and 7.30% to senior citizens on its 680-day deposit.
Indian Bank also raised rates on its 555-day Ind Grow and 777-day Ind Prosper schemes by 15 basis points each, effective October 23. The revised rates stand at 6.80% and 6.75%, respectively.
