RBI Bulletin October 2026: Only 74% of Rate Cut Reached New Loans; Inflation Risks Rise

When RBI cut the repo rate by 1.25 percentage points between February 2025 and March 2026, banks passed on only about three-quarters of it to new loans. That is one finding in the RBI Bulletin October 2026, released on Friday, 23 October. The same issue warns that a renewed West Asia conflict has amplified inflation pressures worldwide, even as India’s economy keeps its strength. Here is what the four articles say and what they mean for your money.

RBI Bulletin October 2026: what is inside

RBI says the views in Bulletin articles are those of the authors and do not represent RBI’s own views.

1. State of the economy

According to RBI’s summary, “renewed geopolitical frictions in West Asia and supply chain disruptions have amplified inflationary pressures, prompting major central banks to raise policy rates.”

For India, the article says high-frequency indicators across industry and services show strength. Headline CPI inflation edged up in September on food, fuel and core items. Double-digit growth in merchandise exports in the first half of 2026-27 helped narrow the trade deficit, and FDI, foreign borrowing and remittances strengthened in August. “Strong inflows under the FCNR(B) swap window augmented reserves.” That window explains the large NRI dollar deposits several banks reported this quarter.

Our report on September CPI inflation has the full numbers.

2. How much of a rate cut reaches borrowers?

The weighted average lending rate (WALR) on fresh rupee loans fell 93 basis points against the 125 basis point repo cut from February 2025 to March 2026, a pass-through of about 74% on our calculation. The authors split the 93 bps into an 80 bps “interest rate effect” (banks actually charging less) and a 13 bps “composition effect” (more lending going to cheaper loan types or banks).

What it means for you: the full RBI move does not reach every loan. External benchmark-linked loans, such as most new home loans, move with the repo more directly. This works in both directions, so the October repo hike will also reach those borrowers. See our home loan EMI and rate hike guide.

3. NBFCs in 2025

The NBFC review says credit grew at a double-digit pace to December 2025, asset quality kept improving, and bank borrowing rose as a share of funding. If you keep money in NBFC fixed deposits, use our NBFC FD safety checklist; NBFC deposits are not covered by DICGC insurance.

4. Tracking states with satellite light

A study uses satellite night-time light and Google search trends to estimate activity in Maharashtra, Karnataka and Gujarat faster than annual state GDP data.

FAQs

Does the RBI Bulletin change interest rates?

No. Rates are set by the Monetary Policy Committee. The Bulletin is research and data.

Where can I read it?

On RBI’s website under Publications, Bulletin.

Takeaway: The RBI Bulletin October 2026 says global inflation risks are up but India’s economy is holding, and that about 74% of the last rate-cut cycle reached new loans. Keep an eye on inflation and your loan’s benchmark.