Last updated: October 18, 2026, 3:30 PM IST
If you've been on WhatsApp or X in the last two days, you've probably seen the forwards. Big bold claims: "RBI's new rule from October 16 will make your EMI rise!" Another one says banks will now have to keep 99% of your deposits with the RBI. Some people are even asking whether their savings are safe.
Most of those forwards are wrong — and a few are half-right in a way that makes them more confusing. So let's clear this up properly. On October 9, the Reserve Bank of India issued a circular that changed one specific banking rule, and it took effect from the fortnight beginning October 16, 2026. The rule is real. The panic around it is mostly not.
Here's what actually changed, what it means for your home loan EMI, your fixed deposit, and your savings account — and what the viral messages get completely backwards.
What the RBI actually changed on October 16
The circular — numbered RBI/2026-27/290 and signed by RBI Chief General Manager Manoranjan Padhy — is about something called the Cash Reserve Ratio, or CRR. It says banks must now keep a daily minimum of 99% of their required CRR with the RBI, up from 90% earlier. This applies from the reporting fortnight that began on October 16, 2026.
Read that line again, because the whole confusion starts here: it is 99% of the required CRR, not 99% of your deposits. Those are two very different things, and the forwards that say "banks must now keep 99% of deposits with RBI" are simply wrong. The ANI report on the circular confirms the 90% to 99% shift in the daily minimum maintenance requirement, effective from the October 16 fortnight.
Two things did not change, and this matters more than anything else in this article:
- The CRR rate itself is still 3% of net demand and time liabilities. The RBI did not raise the percentage banks must hold — it only tightened how strictly they must hold it day to day.
- The fortnightly average requirement is still 100%. Banks just get less wiggle room on individual days.
What is CRR, in simple words?
CRR is the slice of a bank's deposits that it must park with the RBI in cash, instead of lending it out. Right now that slice is 3%. If a bank has deposits of ₹100, it keeps ₹3 with the RBI. That money earns the bank zero interest — which is exactly why banks would rather keep as little as possible parked there.
Until now, the rule was: maintain at least 90% of that required ₹3 every single day, and make sure the average over a two-week (fortnight) period comes to 100%. Now the daily floor is 99%. In plain terms: banks now have to keep almost the full CRR amount parked with the RBI on a daily basis, with very little day-to-day slack.
Think of it like a school attendance rule. Earlier the school said "show up at least 90% of the days, and average full attendance over the month." Now it says "show up 99% of the days." Your homework hasn't changed — only how strictly attendance is checked.
Why did the RBI do this right now?
The circular itself gives a short reason: the RBI did it after a "review of the current liquidity conditions." In plain English, the central bank wants to keep a tighter grip on how much spare cash is floating around the banking system.
It fits a bigger pattern. On October 7, the RBI raised its key policy rate — the repo rate — from 5.25% to 5.50%. That was the first repo hike in nearly four years, and it signalled that the central bank is now in tightening mode after a long easing phase. Analysts at Jefferies estimated the CRR move alone could absorb ₹40,000 to ₹80,000 crore of liquidity and push banks' cost of funds up by 1 to 2 basis points.
There's more: on October 13, reports said the RBI sold about ₹25,000 crore worth of government securities in the market — another classic move to soak up surplus cash. Put together, the message is clear: surplus liquidity season is ending, and the RBI is pulling the levers one by one.
Will your EMI go up? Here's the honest answer
Let's separate two things, because this is where the forwards mix everything up.
The CRR rule by itself does not raise your EMI. Your home loan, car loan or personal loan EMI is linked to your bank's lending rate — not to the daily CRR maintenance rule. The CRR change is a liquidity-management tool between banks and the RBI. It does not add a line to your loan statement.
But many people's EMIs are going up — because of the repo hike. That happened on October 7, and banks have already started passing it on. SBI, for example, raised its external benchmark lending rate (EBLR) from 7.90% to 8.15% and its repo-linked lending rate (RLLR) from 7.50% to 7.75%, and increased its MCLR by 15 basis points across five tenors — 3-month at 8.40%, 6-month at 8.75%, 1-year at 8.85%, 2-year at 8.90% and 3-year at 8.95% — all effective October 15. The Hindu BusinessLine report on SBI's hike confirms the numbers and the October 15 effective date. Punjab National Bank, Bank of Baroda, Indian Bank, Bank of India and Indian Overseas Bank have also raised their repo-linked rates.
What does that mean for you in practice?
- If your home loan is linked to the repo rate (most floating-rate loans taken after October 2019 are), your bank will reset your rate on your loan's reset date — usually every 3 months. The higher rate hits you then, not today.
- Many banks respond by stretching your loan tenure instead of raising your EMI. Your monthly payment stays the same, but you pay for more months — which costs you more in total interest.
- If you're on a fixed-rate loan, nothing changes until your fixed period ends.
So if your EMI rises in the coming months, blame the repo hike, not the CRR circular. The forwards that pin it on the October 16 rule have the right fear and the wrong cause.
What happens to your fixed deposit?
This is the other big question doing the rounds: will FD rates change? The short answer is — probably not, at least not right away.
SBI chairman C S Setty has said the bank sees no need to touch deposit rates for the next 2 to 3 months, because the banking system still has surplus liquidity overall. And whatever your bank decides, your existing FDs are untouched — the rate locked when you booked the deposit stays for the full tenure. A rule change never re-prices an FD you've already opened.
That said, the direction of travel has shifted. Bajaj Finance moved first, raising its FD rates by 15 to 40 basis points from October 7 — up to 7.75% for general customers and 8.15% for senior citizens. If the RBI keeps tightening, more lenders could follow in the coming quarters. Anyone parking money for steady income may want to compare options before locking in, including government-backed schemes — we recently broke down the Post Office Monthly Income Scheme's 2026 rates for exactly this kind of comparison.
The biggest myths in the viral forwards — busted
Let's take the forwards one by one:
- "Banks must keep 99% of deposits with RBI." False. It's 99% of the required CRR (which is 3% of deposits). The bank still lends out the rest.
- "RBI is taking your money." False. The money parked with the RBI belongs to the banks, not to you, and your deposits stay in your account, fully withdrawable.
- "Your savings are at risk." False. This rule is about bank-to-RBI balances. Your savings account, current account and FD are untouched. Deposits up to ₹5 lakh per depositor per bank are also insured by DICGC.
- "You need to rush and withdraw cash." False, and honestly the worst advice in the whole forward.
One warning the RBI itself has repeated, and it's worth repeating here: the RBI never sends you emails, SMS or phone calls asking for personal or banking details. If a forward about this rule comes with a link asking you to "verify" something — delete it. That's the real danger hiding inside these viral messages.
What should you actually do?
Not much, honestly — but a little homework now can save you money later.
First, check your home loan's reset date and which benchmark it's linked to. If it's repo-linked, expect a small rise at the next reset, and run the numbers on whether a part-prepayment beats a longer tenure. Second, if you're about to open an FD, don't lock in for 5 years in a hurry this week — rates may move in the coming quarters as the tightening cycle plays out. Third, keep your emergency cash where it stays liquid and accessible; if you keep a big idle balance, a zero balance savings account with a good sweep-in facility can quietly earn you more than a plain savings account.
Frequently Asked Questions
What is the RBI's new rule from October 16, 2026?
The RBI raised the daily minimum CRR banks must maintain with it — from 90% to 99% of the required CRR — effective from the fortnight beginning October 16, 2026. The CRR rate itself (3%) and the fortnightly average requirement (100%) did not change.
Will my home loan EMI increase because of this CRR rule?
No. The CRR rule doesn't set your loan rate. But your EMI may still rise because of the RBI's October 7 repo rate hike (5.25% to 5.50%), which banks like SBI, PNB and Bank of Baroda have already started passing on. Repo-linked loans reset on their scheduled reset dates.
Is my bank deposit safe after this rule?
Yes. The rule only concerns balances banks keep with the RBI. Your savings account, current account and fixed deposits are completely unaffected and remain fully withdrawable. Deposits up to ₹5 lakh per depositor per bank are insured by DICGC.
Should I break my FD or open a new one right now?
Don't break an existing FD in panic — its rate is locked for the full tenure. If you're opening a new one, it's worth comparing rates first; SBI expects no change for 2–3 months, while Bajaj Finance has already raised rates by up to 40 basis points.
Did the RBI really ask banks to keep 99% of deposits?
No — that's the most viral myth of all. It's 99% of the required CRR (3% of deposits), not 99% of deposits. Banks continue to lend and operate exactly as before.
Sources
- Daily Prabhat (ANI) — "RBI Raises Banks' Daily Minimum CRR Maintenance Requirement to 99% From 90%"
- The Hindu BusinessLine — "SBI Ups Marginal Cost of Funds Based Lending Rates by 15 Basis Points Across Five Tenors"
My Personal Take
Honestly, I find the forwards more interesting than the rule itself. The RBI made a technical tweak — 90 to 99, one number in a circular — and within 48 hours half the country was convinced banks were seizing deposits. That tells you how little financial plumbing the average person understands, and how fast fear travels when the words "RBI" and "new rule" appear together.
My advice: stop reading the forwards and start reading your loan's reset date. The repo hike is the thing that actually touches your wallet, and it touched it on October 7 — nine days before the rule everyone's panicking about. If there's one habit worth building from this episode, it's this: when a money forward scares you, check the actual circular first. It takes five minutes, and it would have saved a lot of people a lot of worry this week.
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