Punjab National Bank (PNB) has raised its Marginal Cost of Funds-based Lending Rate (MCLR) by 10 basis points across all six tenures, effective November 1, 2026, in a move that will make MCLR-linked loans costlier for the public sector bank's borrowers when their rates come up for reset.

Source: Upstox

Following the revision, PNB's overnight MCLR has risen from 8.00 per cent to 8.10 per cent, the one-month rate from 8.25 per cent to 8.35 per cent, the three-month rate from 8.50 per cent to 8.60 per cent, the six-month rate from 8.65 per cent to 8.75 per cent, the one-year rate from 8.80 per cent to 8.90 per cent, and the three-year rate from 9.10 per cent to 9.20 per cent.

PNB notified the National Stock Exchange and BSE of the revision on October 31, 2026, Kalkine reported, adding that the previous MCLR schedule had been in place since October 1 and that the bank's repo-linked lending rate and base rate were left unchanged.

Source: Kalkine

What it means for borrowers

The increase could translate into higher borrowing costs for customers with MCLR-linked home loans and other floating-rate loans, depending on their loan reset dates, Upstox reported. For a floating-rate borrower, the actual EMI impact will depend on the loan's benchmark, outstanding principal, remaining tenure and applicable reset date, and repo-linked home loans are not automatically affected by a change in MCLR.

Banks are repricing after the October repo hike

The Reserve Bank of India, in its October 7 monetary policy review, raised the policy repo rate by 25 basis points to 5.50 per cent and shifted its stance to calibrated tightening. Following that hike, State Bank of India raised its MCLR by 15 basis points across five tenures effective October 15 and also increased its external benchmark-linked rate and repo-linked lending rate, while Bank of Baroda's MCLR schedule effective October 12 reflected no change, with its one-year MCLR at 8.75 per cent.

Source: Upstox

Banks have also been raising short-term funds through certificates of deposit rather than raising term deposit rates: fresh CD issuances of Rs 98,195 crore in October 2026 exceeded maturities of Rs 78,290 crore, a net incremental issuance of Rs 19,905 crore, and the weighted average rate on new issuances rose to 6.93 per cent against 6.57 per cent on the CDs that matured, The Hindu BusinessLine reported. V Rama Chandra Reddy, Head of Treasury at Karur Vysya Bank, told the paper the net issuance and higher yields suggested banks were actively securing additional short-term resources at higher rates rather than merely rolling over existing liabilities.

Source: The Hindu BusinessLine

The RBI's next Monetary Policy Committee meeting is scheduled for December 2-4, 2026, and its policy decision is awaited.