Deposit rates ease, lending rates stable

Interest rates offered by banks on fresh term deposits declined in July, while rates charged on new loans remained largely unchanged, according to Reserve Bank of India (RBI) data released on Monday. The average interest rate on fresh rupee term deposits fell to 5.90 per cent in July from 5.99 per cent in June, a decline of 0.09 percentage points, as reported by multiple sources citing the RBI data.

At the same time, the average lending rate on fresh rupee loans declined marginally to 8.52 per cent from 8.53 per cent in June, according to the same data. The RBI said lending rates on fresh as well as existing rupee loans "exhibited a mixed movement across sectors in July 2026," as quoted in reports.

Sectoral variations in lending rates

Detailed RBI data showed that the movement in borrowing costs differed across sectors during July. The rate on fresh loans to the trade sector declined to 7.79 per cent from 8.00 per cent in June, while the rate for professional services fell to 8.19 per cent from 8.32 per cent, as reported by ANI.

However, fresh lending rates for some other sectors increased. The rate for infrastructure rose to 7.71 per cent from 7.56 per cent, while that for large industries increased to 7.53 per cent from 7.46 per cent. The rate on fresh loans to MSMEs also edged up to 8.82 per cent from 8.78 per cent during the month, according to the detailed RBI data.

Outstanding rates and MCLR

The average rate on existing rupee loans edged up to 8.97 per cent in July from 8.96 per cent in June, as per the RBI data. Meanwhile, the average rate on existing rupee term deposits remained unchanged at 6.58 per cent in July compared with June.

The one-year median Marginal Cost of Funds-based Lending Rate (MCLR) of scheduled commercial banks rose to 8.70 per cent in August from 8.60 per cent in July, according to an RBI circular issued on August 31, as reported by The Hindu Business Line and CNBC TV18. This 10-basis-point increase in the benchmark lending rate comes even as fresh lending and deposit rates eased marginally in July.

Data scope

The RBI's data cover scheduled commercial banks, excluding regional rural banks and small finance banks, as noted in one report from ANI.