Nomura sees two RBI rate hikes by December: Car-loan EMI checks

Nomura expects the Reserve Bank of India to raise its repo rate by 25 basis points in October and another 25 basis points in December, taking the terminal policy rate to 5.75%, according to reports published on 28 Sep 2026. This is an analyst forecast, not an RBI decision, but it puts a possible rate path back on the radar for people buying cars or repaying floating-rate vehicle loans.

The practical question for borrowers is not whether every car-loan EMI will immediately rise. It is which loans are linked to an external benchmark, when their reset takes place, and whether a lender changes the EMI, the remaining tenure or both if rates move.

Key takeaways

• Nomura expects two 25-basis-point RBI hikes by December, but the call remains an expectation.
• A full 50-basis-point increase would equal 0.50 percentage points, though lender pass-through may differ.
• Floating-rate borrowers need to check their benchmark, spread, reset date and revised amortisation schedule.
• New car buyers should compare the all-in loan cost and repayment terms, not only the advertised EMI.

What Nomura’s forecast says

Moneycontrol reported on 28 Sep 2026 that Nomura’s special report expected a 25-basis-point hike at the October review and another 25-basis-point move in December. Financial Express independently reported the same two-step forecast on 28 Sep 2026, describing it as a call by the Japanese brokerage rather than a confirmed policy action.

In plain terms, the forecast describes a possible cumulative increase of 50 basis points, or 0.50 percentage points, by December. The reports link the view to concern about cyclical inflation pressures, including food and energy costs, while also noting that Nomura sees the rate path as a limited recalibration rather than an open-ended tightening cycle. Those are the brokerage’s expectations, not guidance from the central bank.

That distinction matters because the RBI’s Monetary Policy Committee still has to decide the policy rate at each review. Until an RBI announcement and any subsequent lender communication, 5.75% should be treated as an expected terminal level in Nomura’s scenario, not as the current rate on a car loan.

Why the forecast matters for car-loan EMIs

When the policy rate changes, lenders may reassess the pricing of loans linked to an external benchmark. A floating-rate car loan can therefore be affected through the interest rate, the EMI, the repayment period or a combination of these. The effect is not identical across borrowers because the contract can include a lender spread, a reset frequency and different rules for converting a rate change into a revised repayment schedule.

A 25-basis-point move means 0.25 percentage points. If both parts of Nomura’s forecast were implemented and fully passed through, the total policy-rate change would be 0.50 percentage points. That still would not translate into one universal EMI increase: the outstanding principal, remaining tenure, lender margin and reset date all matter. A borrower near the start of a long loan and a borrower close to repayment can see very different rupee effects from the same rate change.

For a new vehicle purchase, the useful comparison is the complete borrowing cost over the chosen tenure. An apparently lower EMI can reflect a longer repayment period, while a slightly higher EMI can come with a shorter term. Fuel and insurance also sit alongside the loan in the monthly ownership budget. FuelPrice’s car-loan EMI guide explains the affordability calculation, while the fuel-cost calculator can help separate the repayment cost from regular running expenses.

What borrowers can check now

For existing floating-rate loans

• Benchmark: Check whether the agreement links the loan to an external benchmark or another reference rate.
• Reset terms: Note the next reset date and how often the lender reviews the rate. A policy decision and an EMI change do not necessarily occur on the same day.
• Spread: Record the contractual spread over the benchmark. It is the part of the price that may remain separate from the policy-rate move.
• Repayment choice: Check whether the lender normally changes the EMI, extends the tenure or offers both options when the rate changes.
• Written schedule: Compare any revised amortisation schedule with the existing one so the change in total interest and remaining months is clear.

For people planning a car purchase

Compare the annual interest rate, processing charges, insurance bundling terms, part-prepayment conditions and total repayment amount across offers. The relevant rate is the one stated in the sanction or loan agreement, not a headline rate that may depend on a particular borrower profile. It is also useful to model the purchase with a buffer for a possible floating-rate reset rather than treating an analyst forecast as a guaranteed outcome.

What changes now, and what does not

Nothing in the two reports changes an existing loan contract or directs lenders to revise car-loan pricing. The forecast becomes relevant only if the RBI takes the expected decisions and lenders transmit them under their own benchmark and reset rules. A different RBI outcome, a delay in transmission or a change in the borrower’s contractual spread could produce a different result.

FuelPrice previously explained the possibility of an October rate move in its RBI rate-watch article for car-loan borrowers. The new development is Nomura’s reported expectation of a second move in December. Readers should therefore separate three stages: the brokerage forecast, the RBI’s actual decision and the lender’s notice showing how that decision applies to a particular loan.

What to watch next

The next useful signals will be the RBI’s formal policy communication in early October and any rate-reset notices issued by lenders afterward. For a borrower, the documents that matter most are the benchmark name, the spread, the reset date and the revised repayment schedule. Until those are available, the 5.75% figure remains a reported expectation and not a confirmed car-loan rate.

Sources

• Moneycontrol — “RBI likely to hike rates 25 bps in October, December; Nomura sees terminal rate at 5.75%” — 28 Sep 2026
• Financial Express — “RBI MPC October meeting: Will $107 Brent and 4.82% inflation result in 25 bps rate hike?” — 28 Sep 2026

This article is for general information only and is not financial, insurance or legal advice.