Deposit rates pick up as banks signal upward repricing cycle

Mumbai: Deposit rates across the banking system rose in March 2026, with the weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits at commercial banks increasing by 42 basis points to 6.07%, up from 5.65% in February, data released by the Reserve Bank of India showed.

Private sector lenders led the uptick, raising deposit rates by 39 basis points month-on-month, with average rates on fresh rupee term deposits climbing to 6.26% at end-March from 5.87% in February.

Public sector banks also raised deposit rates, though at a more moderate pace, with rates increasing by 24 basis points to 6.45% from 6.21%.

The WADTDR on outstanding rupee term deposits of banks remained unchanged at 6.62% in March.

As reported in its March 14 edition, ET had indicated that banks believe deposit rates have bottomed out and may see further upward repricing.

Meanwhile, the weighted average lending rate (WALR) on fresh rupee loans of commercial banks eased by 4 basis points to 8.40% in March 2026, compared with 8.44% in February. Lending rates for private sector banks declined by 4 basis points to 9.12%, while those for public sector banks remained unchanged at 7.84%.

The WALR on outstanding rupee loans of banks edged down marginally to 8.99% in March from 9.00% in February.The one-year median marginal cost of funds-based lending rate (MCLR) of banks rose to 8.55% in April 2026, up from 8.40% in March.

Overall, WALRs on both fresh and outstanding rupee loans showed mixed trends across sectors in March 2026.