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Four of India’s biggest lenders have raised their loan rates for November. Punjab National Bank, HDFC Bank, Canara Bank and Bank of Baroda have all lifted their marginal cost of funds-based lending rates (MCLR), the benchmark behind many older home, personal and other retail loans. The moves follow the Reserve Bank of India’s first repo rate increase in nearly four years, and they signal that loans are getting dearer, not cheaper.

A man works through figures on a calculator as his wife looks on at home

Four banks, one direction

The changes were filed with the stock exchanges between 31 October and 9 November. Each is small on its own, but all point the same way.

Punjab National Bank raised its MCLR by 10 basis points (0.10 percentage point) across all tenors from 1 November. Its one-year MCLR went from 8.80% to 8.90%, and its three-year rate from 9.10% to 9.20%.
HDFC Bank raised its MCLR by 5 to 15 basis points from 7 November. Its one-year rate rose from 8.30% to 8.45%, and the full range now runs from 7.85% to 8.70%, up from 7.75% to 8.55%.
Canara Bank raised every tenor by exactly 10 basis points from 12 November. Its one-year MCLR moves from 8.80% to 8.90%, and its three-year rate to 9.20%.
Bank of Baroda made the sharpest short-term move, from 12 November. Its three-month and six-month MCLR rise by 20 basis points each, to 8.50% and 8.70%. Its one-year rate goes from 8.75% to 8.85%. The overnight rate stays at 7.85%.

None of the four filings gave a reason. Banks must review their MCLR at least once a month, and these revisions came through that routine. The direction, though, is new.

Why loans are getting dearer

On 7 October the RBI’s Monetary Policy Committee, chaired by Governor Sanjay Malhotra, raised the repo rate by 25 basis points, from 5.25% to 5.50%. It also changed its stance from “neutral” to “calibrated tightening”. The committee said rate cuts were off the table in the near term, and that its next move could only be a hike or a pause.

The trigger was inflation. Retail (CPI) inflation rose to 4.8% in August from 4.5% in July, driven by food and fuel. The RBI now projects inflation at 5.2% for 2026-27, and at 6.0% for the October–December quarter, the top of its tolerance band. It listed crude oil volatility, a weak monsoon, El Niño and tighter global financial conditions as risks.

The bond market has moved the same way. According to Business Standard, India’s 10-year government bond yield rose from 6.50% at the start of Samvat 2082 to 7.19% on 6 November, after touching 7.48% on 26 October. Trading Economics reported that, at that peak, markets were pricing in roughly 125 basis points of further rate hikes over the next 12 months. The rupee fell 6.37% against the dollar over the same Samvat year and closed at 93.91 on 6 November.

MCLR or repo-linked: which loans move

Not every borrower is hit by the same change, and the type of loan matters more than the bank.

Repo-linked (external benchmark) loans track the RBI’s repo rate directly. These borrowers felt the October hike first. State Bank of India, for example, raised its External Benchmark Linked Rate by 25 basis points, from 7.90% to 8.15%, from 15 October, as reported by Business Today and Mint. The latest MCLR revisions do not automatically change these loans.

MCLR-linked loans are mostly older home loans, plus some personal and business loans. They follow each bank’s own funding cost. These are the borrowers affected by the four November revisions. Even then, the higher rate usually applies only when the loan reaches its reset date.

What it means if you are paying an EMI

For readers in their 20s and 30s, a home loan is often the largest monthly bill, so small rate changes add up.

Business Today worked through an example: a ₹50 lakh loan with 20 years left. At 8%, the EMI is about ₹41,822. At 8.25%, with the tenure unchanged, it rises to about ₹42,603, roughly ₹781 more every month. The MCLR increases this month are smaller, at 10 to 20 basis points, so the effect on a loan of that size would be proportionately smaller.

Many borrowers will not see a bigger EMI at all. Banks often keep the instalment the same and stretch the tenure instead, which raises the total interest paid without showing up in the monthly statement. Kapil Makhija, COO of MinEMI, told Mint that “the real damage happens when rates rise”, because a longer tenure quietly adds to the overall cost.

Borrowers on older MCLR or base-rate loans can ask their bank about converting to the rate it offers new customers. This is not free. Makhija told Mint that banks typically charge 0.25% to 0.50% of the outstanding principal, plus 18% GST, and some charge a flat fee instead. HDFC Bank charges 0.25% of the outstanding principal, capped at ₹5,000 plus taxes, for certain fully drawn home loans; Kotak Mahindra Bank charges 0.5%, capped at ₹10,000 plus taxes, for switching between floating-rate schemes on certain housing loans. Nikhil Mawale, CEO of PropertyDrone Realty, told Mint that “conversion fees, taxes and changes to the repayment schedule can reduce the benefit.”

Savers get a small bump

The same cycle is lifting deposit rates. HDFC Bank raised rates on select fixed deposits below ₹3 crore by up to 50 basis points from 4 November. Its highest rate is now 6.60% for regular customers and 7.20% for senior citizens. Bank of India raised its one-year rate to 6.6% from 2 November and launched a 500-day deposit at up to 6.85%. Among small finance banks, Suryoday is offering up to 8.25% on five-year deposits for general customers, according to Business Standard.

Deposit rates usually move more slowly than loan rates, and higher inflation eats into real returns. Still, for first-time savers parking an emergency fund, the direction has turned.

Key numbers

5.50%: RBI repo rate after the 7 October hike, up from 5.25%
4.8%: CPI inflation in August 2026, up from 4.5% in July
8.85%: Bank of Baroda’s one-year MCLR from 12 November, up from 8.75%
8.45%: HDFC Bank’s one-year MCLR from 7 November, up from 8.30%
8.90%: one-year MCLR at both PNB and Canara Bank, each up 10 basis points
8.15%: SBI’s External Benchmark Linked Rate from 15 October, up from 7.90%
7.48%: peak 10-year government bond yield on 26 October
₹781: extra monthly EMI on a ₹50 lakh, 20-year loan when the rate goes from 8% to 8.25% (Business Today example)

What to watch

October inflation data. If retail inflation keeps climbing towards the RBI’s 6% ceiling, the case for another hike grows.
The December policy. The MPC meets from 2 to 4 December, with the decision due on 4 December. The RBI has already said its options are a hike or a pause.
December MCLR reviews. Banks review MCLR monthly. Another round of increases at the start of December would confirm the trend.
Crude oil and the rupee. Bank of Baroda chief economist Madan Sabnavis told Business Standard that “the rupee was under relentless pressure with FPIs being negative, trade bill widening and dollar strengthening”. Any easing in oil prices or foreign selling would take some pressure off rates.
Your reset date. It is printed in your loan agreement and annual statement, and it decides when this month’s changes reach you.