RBI MPC minutes: 6-0 vote lifted repo to 5.50%, two dissent on stance
Minutes of the 5-7 October 2026 MPC meeting confirm a unanimous 25 bps repo increase to 5.50% and a 4-2 split on moving the stance to calibrated tightening.
The Announcement
The Reserve Bank of India on 21 October 2026 published the minutes of the Monetary Policy Committee meeting held from 5 to 7 October 2026 (Press Release 2026-2027/1361). They confirm that the MPC voted unanimously, 6-0, to raise the policy repo rate under the liquidity adjustment facility by 25 bps (0.25 percentage points), from 5.25% to 5.50%. As a result, the standing deposit facility (SDF) rate stands at 5.25% and the marginal standing facility (MSF) rate and the Bank Rate at 5.75%.
The committee also changed its stance from neutral to "calibrated tightening". That part of the decision was not unanimous: the resolution notes that Dr. Nagesh Kumar and Prof. Ram Singh "were of the view that the stance be retained at neutral". Both still voted for the rate increase.
The minutes, a statutory record under Section 45ZL of the RBI Act, 1934, set out each member's vote and written statement on the decision announced on 7 October.
Why It Changed
Per the resolution, the MPC said inflation and its outlook "are not benign as they were last year", with headline CPI inflation expected to average almost 5.8% over the next three quarters. The release records CPI inflation at 4.8% in August 2026, up from 4.5% in July, with core inflation at 4.2%. The MPC projects CPI inflation at 5.2% for 2026-27, with Q3 at 6.0%, and real GDP growth at 7.1%.
The resolution states that the calibrated tightening stance "only signals" that, given current conditions, rate cuts are off the table in the near term and that policy action ahead can only be a hike or a pause, depending on the outlook. Governor Sanjay Malhotra wrote in the minutes that the duration and extent of the cycle would be contingent on underlying inflation and second-round effects. Dr. Poonam Gupta wrote that it was "conceivable" a further increase might be needed. Prof. Ram Singh wrote that he saw a case for "incremental, mild repo rate hikes, not high-for-long rates".
Impact on Borrowers
This is arithmetic, not a forecast of lender behaviour. The standard EMI formula is EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r the monthly rate (annual rate divided by 12) and n the number of months.
Illustration: take a Rs 50 lakh, 20-year (n = 240) floating-rate home loan priced at 7.50%, and assume the full 25 bps increase is passed through, taking it to 7.75%. At 7.50% the EMI is about Rs 40,280. At 7.75% it is about Rs 41,047, an increase of roughly Rs 767 a month (figures rounded to the nearest rupee). Over 240 months that adds up to roughly Rs 1.84 lakh more in total repayments. If the lender instead keeps the EMI at Rs 40,280 and extends the tenure, the same loan runs to about 252 instalments, around 12 more.
Announced is not the same as transmitted. Loans linked to an external benchmark such as the repo rate are repriced on the reset dates in the loan agreement, often quarterly. MCLR-linked loans move with a lag, as banks revise their MCLR and each loan reaches its reset date. Borrowers on older MCLR or base-rate loans can ask their bank about moving to an external benchmark; banks may charge a conversion fee. The home loan EMI calculator and the personal loan EMI calculator let readers run these numbers on their own balance, rate and remaining tenure.
Impact on Savers
The MPC sets the policy rate, not deposit rates. Each bank decides its own fixed-deposit rates as a commercial matter, and deposits already booked keep their contracted rate until maturity.
Illustration: if a bank were to lift a one-year deposit rate by the same 25 bps, from 6.25% to 6.50%, Rs 1 lakh compounded quarterly would grow to about Rs 1,06,398 at the old rate and about Rs 1,06,660 at the new rate. That is interest of Rs 6,398 versus Rs 6,660, a difference of about Rs 262 a year before tax (rounded to the nearest rupee). The FD calculator can be used to compare any tenor and rate pair.
Small-savings schemes such as PPF, NSC, SCSS and Sukanya Samriddhi are outside this decision. Their rates are notified separately each quarter by the Finance Ministry, and the repo change does not alter existing balances in those schemes.
What Happens Next
The repo rate has stood at 5.50% since the 7 October announcement. From here, transmission runs through lenders' benchmark resets and their own deposit pricing, on each institution's timetable.
The resolution states that the next MPC meeting is scheduled for 2 to 4 December 2026. That is a published calendar date; the minutes record that any action at the meeting depends on incoming data on inflation, its diffusion and second-round effects.
FAQ
What exactly do the October MPC minutes record?
The minutes (Press Release 2026-2027/1361, 21 October 2026) record that all six MPC members voted to raise the policy repo rate by 25 bps to 5.50%. The committee also changed its stance from neutral to calibrated tightening; Dr. Nagesh Kumar and Prof. Ram Singh preferred to retain neutral.
When did the new repo rate take effect?
The decision was taken at the MPC meeting held from 5 to 7 October 2026, and the repo rate has stood at 5.50% since that announcement. The minutes record how each member voted and why.
How does a repo change reach my home loan EMI?
Loans linked to an external benchmark such as the repo rate are repriced on the reset dates set out in the loan agreement, often quarterly. MCLR-linked loans adjust with a lag as banks revise their MCLR and the loan reaches its reset date. The home loan EMI calculator shows the effect on any balance.
Does this change existing fixed deposits or small-savings balances?
No. A fixed deposit already booked keeps its contracted rate until maturity. New deposit rates are each bank's commercial decision and are not set by the MPC. Small-savings rates are notified separately each quarter by the Finance Ministry.
Where can I read the official minutes?
The full minutes, including each member's statement, are on the Reserve Bank of India website as Press Release 2026-2027/1361 dated 21 October 2026.
This report is based on the official RBI press release dated 21 October 2026, "Minutes of the Monetary Policy Committee Meeting, October 5 to 7, 2026", published by the Reserve Bank of India.