RBI proposes three-month loan rate resets for faster EMI relief

The Reserve Bank of India, the country's central bank, wants to change how banks set interest rates on loans.

Right now, some loans only change their interest rate every six months or even once a year.

The RBI wants banks to update loan interest rates at least every three months.

This means that when the RBI changes its policy rate, borrowers would feel the effect sooner.

It works both ways: rate cuts and rate increases would both arrive faster.

The new rules are planned to start on April 1, 2027.

Existing loans would move to the new system by April 1, 2029, without extra charges.

Banks would also need clear rules for how they decide the extra part of the interest rate they charge.

People can share their opinions about the plan until September 11, 2026.