Average lending rates on new loans firm up

Mumbai Average lending rates on fresh rupee loans rose 39 basis points in January from a month earlier, latest central bank data showed, with the weighted average lending rate (WALR) increasing to 8.67%.

One basis point is a hundredth of a percentage point.

The rise from 8.28% in December was primarily driven by a 44-basis point increase in WALR by state-run banks to 8.05%, while private sector banks recorded an 18-basis point increase to 9.32%.

The Reserve Bank of India (RBI) has reduced its repo rate by 125 basis points to 5.25% over the course of 2025.

In contrast, the WALR on outstanding rupee loans of commercial banks declined marginally to 9.04% in January 2026 from 9.06% in December 2025.

The one-year median Marginal Cost of Funds-based Lending Rate (MCLR) increased to 8.45% in February 2026 from 8.40% in January 2026.

Meanwhile, the weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits stood at 5.66% in January 2026, slightly lower than 5.67% in December 2025. The WADTDR on outstanding rupee term deposits declined to 6.64% in January 2026 from 6.68% in the previous month.