2 weeks ago
RBI Bulletin Reports Higher Deposit, Lending Rates Amid Credit Demand
The Reserve Bank of India said banks have recently raised some new deposit and loan rates.
This happened as more people and businesses wanted to borrow money.
New deposit rates rose faster in June than in May.
New loan rates also increased slightly.
However, the one-year MCLR, another lending-rate measure, went down in June.
Bank lending and deposits both grew compared with the previous year.
Retail, services and industrial businesses received strong credit flows.
The RBI said rate cuts were being passed on to borrowers more slowly during May and June.
The weighted average domestic term deposit rate on fresh deposits rose 16 basis points in June 2026, after increasing 4 basis points in May.
The weighted average lending rate on fresh rupee loans increased 2 basis points in June, following a 1-basis-point rise in May.
The one-year marginal cost of funds-based lending rate declined 15 basis points in June after rising 10 basis points in May.
Scheduled commercial bank credit growth reached 19.3% year-on-year and deposit growth 15.4% as of July 31, 2026.
Credit flows were strong in retail, services and industry, while agricultural credit grew steadily.
- Who
- The Reserve Bank of India, RBI Governor Sanjay Malhotra and scheduled commercial banks.
- What
- Fresh deposit and lending rates hardened in recent months, while credit and deposit growth remained strong.
- Where
- India's banking and credit markets.
- When
- The data covers May, June and July 2026; the bulletin was published on August 25, 2026.
- Why
- Rising credit demand contributed to higher fresh deposit and lending rates, while transmission of earlier repo-rate cuts moderated.
Key facts
- Fresh deposit rate
- The weighted average domestic term deposit rate rose 16 basis points in June 2026, compared with 4 basis points in May.
- Fresh lending rate
- The weighted average lending rate on fresh rupee loans rose 2 basis points in June, compared with 1 basis point in May.
- One-year MCLR
- The one-year marginal cost of funds-based lending rate fell 15 basis points in June after rising 10 basis points in May.
- Repo-rate cuts
- The current easing cycle included cumulative repo-rate cuts of 125 basis points from February through June 2026.
- Credit growth
- Scheduled commercial bank credit grew 19.3% year-on-year as of July 31, 2026.
- Deposit growth
- Scheduled commercial bank deposits grew 15.4% year-on-year as of July 31, 2026.
- Strongest credit areas
- Credit flows were buoyant in retail and services; industrial credit strengthened, supported by MSMEs and large industries.
Sources
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