RBI Policy Oct 2026: Repo Rate Hike, Your EMI & CIBIL
Quick answer: The RBI's Monetary Policy Committee (MPC) announces its decision on Wednesday, 7 October 2026 at 10:00 AM IST. The repo rate is currently 5.25%, and most economists expect a 25 basis point hike to 5.50%, which would be the first increase since February 2023. If it happens, EMIs on floating-rate home, car and personal loans are likely to rise, new fixed deposit rates may go up, and borrowing gets a little more expensive. Your CIBIL score doesn't change because of the repo rate, but it decides the interest rate you are offered on top of it.
RBI MPC October 2026: key dates and numbers
| Detail | Status |
|---|---|
| MPC meeting | 5–7 October 2026 |
| Decision announced | 7 October 2026, 10:00 AM IST |
| Governor's press conference | 7 October 2026, 12:00 PM IST |
| Current repo rate | 5.25% (unchanged since December 2025) |
| Expected move | +25 bps to 5.50% (majority of economists) |
| Latest CPI inflation | 4.82% (August 2026) |
| Last hike | February 2023 |
Governor Sanjay Malhotra will announce the decision, which you can watch live on the RBI website and its official YouTube channel.
Why is a repo rate hike expected?
After cutting rates by 125 basis points through 2025, the RBI has held the repo rate at 5.25% for four policy meetings in a row. The mood has now shifted because of:
- Rising retail inflation: CPI inflation climbed to 4.82% in August 2026, led by food prices.
- Higher crude oil prices: India imports most of its oil, so costlier crude feeds into fuel, transport and overall prices.
- Pressure on the rupee: a weaker rupee makes imports more expensive and adds to inflation.
- Hawkish global central banks: other major central banks are leaning toward tighter policy.
In a Reuters poll of 61 economists, 35 expected a 25 bps hike to 5.50%. A Business Standard survey found eight of ten respondents expecting the same. SBI Research and Nomura have both suggested another 25 bps hike in December, which could take the repo rate to 5.75% by the end of 2026.
What a repo rate hike means for your EMI
Most new floating-rate retail loans in India are linked to an external benchmark, usually the repo rate. When the repo rate rises, your lender usually passes the increase on at the next reset date.
Here's a rough idea of the impact of a 0.25% rise on a ₹50 lakh home loan for 20 years:
| Interest rate | Monthly EMI (approx.) | Change |
|---|---|---|
| 8.00% | ₹41,822 | — |
| 8.25% | ₹42,603 | about ₹780 more per month |
Over the full 20 years, that small change adds up to roughly ₹1.9 lakh in extra interest. Some banks keep the EMI the same and extend your tenure instead, which costs even more in total interest.
What to do:
- Check whether your loan is linked to the repo rate (EBLR) or to MCLR, and when it resets.
- If you have spare funds, a part-prepayment now reduces the principal the higher rate applies to.
- Ask your bank to keep your tenure unchanged and raise the EMI slightly if you can afford it; you'll pay less interest overall.
- If you're on an old MCLR or base-rate loan, compare the cost of switching to a repo-linked loan.
What it means for fixed deposit savers
A hike is good news for savers. Banks tend to raise FD rates after a repo rate increase, so new deposits may earn more. Existing FDs keep their locked-in rate until maturity. If you're planning a large FD, consider splitting it into a few smaller deposits ("FD laddering") so you can lock in higher rates if they keep rising.
How your CIBIL score fits in
The repo rate sets the base, but your CIBIL score decides how much the lender adds on top. When rates are rising, a strong score matters even more:
- A score of 750 or above usually gets you the lowest rate a bank offers.
- A score between 650 and 749 may still get approval, but often at a higher rate.
- Below 650, you may face rejections or much costlier loans.
Even a 0.5% lower rate because of a better score can save you more than the whole of a 0.25% repo hike. If you plan to borrow in the next few months, now is a good time to:
- Check your credit report for errors and get them corrected.
- Pay every EMI and credit card bill on time.
- Keep your credit card usage below 30% of the limit.
- Avoid applying for several loans or cards at once.
Read more: How to Increase CIBIL Score from 600 to 750 and CIBIL Score for Home Loan: Minimum Score & How It Affects EMI.
Bigger picture: credit is growing fastest outside the metros
A joint report by TransUnion CIBIL and the Finance Industry Development Council (FIDC), released on 5 October 2026, found that NBFCs now make up 47% of loans given to first-time borrowers in India. Their credit-active customer base has grown nearly 7-fold in a decade, with 59% of it in semi-urban and rural areas and women making up 27%. Importantly, 90+ day delinquencies in this segment have fallen to 1.1% from 2.7%. For new borrowers, a first small loan repaid on time is still the fastest way to build a CIBIL score.
Frequently asked questions
When is the RBI policy announcement in October 2026?
The RBI announces its decision on 7 October 2026 at 10:00 AM IST, followed by the Governor's press conference at 12:00 PM.
What is the current repo rate in India?
The repo rate is 5.25%, unchanged since December 2025. Check the RBI's announcement on 7 October for any change.
Will my home loan EMI increase if the RBI raises the repo rate?
If your loan is linked to the repo rate (EBLR), your EMI or tenure will likely increase at the next reset. MCLR-linked loans change more slowly.
Does a repo rate hike affect my CIBIL score?
No. The repo rate doesn't change your CIBIL score. But a higher EMI can strain your budget, and any missed payment will lower your score, so plan ahead.
Should I book an FD now or wait?
If a hike is announced, banks may raise FD rates over the following weeks. Splitting your deposit into parts lets you benefit if rates keep rising.
This article is for general information only and isn't financial advice. Rates and EMI figures are approximate; check with your lender for exact numbers. We'll update this post once the RBI announces its decision.
