Repo rate
Also called Policy repo rate
The interest rate at which RBI lends short-term money to banks. Many floating loan rates are linked to it.
The repo rate is the price banks pay to borrow from RBI for a short time. When it rises, banks pay more for money, and they pass that on. Loans linked to the repo rate get costlier at their next reset, and deposit rates often follow, though banks decide that themselves.
Read how the October 2026 rise works through to your loan in RBI raised the repo rate: what it means for your EMI and FD.
Questions people ask
What is the repo rate in simple words?
It is the rate at which the Reserve Bank of India (RBI) lends money to banks for a short time. It is RBI's main lever on prices: raising it makes borrowing costlier across the economy, and cutting it makes borrowing cheaper.
How does the repo rate affect my home loan EMI?
Most new floating-rate bank loans since October 2019 are linked to an outside benchmark, usually the repo rate, and must reset at least once every three months. When the repo rate rises, your loan rate rises at the next reset, so your EMI goes up or your loan runs longer.
What is the current repo rate?
RBI set it at 5.50% on 7 October 2026, up from 5.25%. RBI's Monetary Policy Committee reviews it about every two months, so check rbi.org.in for the latest figure.
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