RBI Data Shows Marginal Shifts in Bank Lending and Deposit Rates for July

The Reserve Bank of India (RBI) has released its latest data on the lending and deposit rates of scheduled commercial banks, pointing to a largely stable interest rate environment characterized by marginal changes in July.

According to the central bank figures, the weighted average lending rate (WALR) on outstanding rupee loans of scheduled commercial banks stood at 8.97 per cent in July, marking a slight increase from 8.96 per cent in June. In contrast, the WALR on fresh rupee loans experienced a minor decrease, easing slightly to 8.52 per cent from 8.53 per cent in the previous month.

The data further indicates that banks have started reducing the rates offered on fresh deposits. The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits dropped to 5.90 per cent in July, down from 5.99 per cent in June. Meanwhile, the rate applicable to outstanding term deposits remained steady at 6.58 per cent throughout the period.

Regarding benchmark lending, the one-year median Marginal Cost of Funds-based Lending Rate (MCLR) for scheduled commercial banks moved upward to 8.70 per cent in August, compared to 8.60 per cent in July. This upward movement in the MCLR suggests that overall funding costs for banks continue to remain elevated, even as modest declines were observed in fresh lending and deposit rates.

"The recent RBI data highlights a stable yet nuanced banking environment where fresh deposit rates are easing, even as benchmark lending costs like the MCLR inch upward. For businesses and entrepreneurs, this means funding costs remain elevated, requiring careful cash flow management and strategic capital allocation when planning short-term borrowings or evaluating debt options in the current macroeconomic climate." — Dr. Shishir Gupta, Founder & CEO, StartupLanes