RBI Lending Rates Analyzed
The Reserve Bank of India (RBI) recently looked at how much banks are charging for loans and savings. They tracked several important numbers, called “rates,” to understand the cost of borrowing money in India. These numbers give a good idea of what banks are doing with their money.
Key Points
- Banks’ new loan rates rose slightly to 8.71%.
- Existing loan rates decreased marginally to 9.21%.
- Banks’ funding cost rates (MCLR) eased to 8.45%.
- New deposit rates increased to 5.59% currently.
- Outstanding deposits rates reduced to 6.73%.
- These changes show banks adjusting to market conditions.
Loan Rates Explained
Banks use something called a “weighted average lending rate” to set the interest they charge on new loans. In November 2025, this rate was 8.71%. This means that the average interest rate across all the new loans being given out by Scheduled Commercial Banks (SCBs) was 8.71%.
Outstanding Loan Rates
Banks also have existing loans that they’ve already made. The rate on those loans went down a little, from 9.24% in October 2025 to 9.21% in November 2025. This suggests that banks are gradually reducing the interest on loans they already hold.
Funding Costs & Deposit Rates
Banks also look at the cost of getting money from people who save with them. The “MCLR” (Marginal Cost of Funds based Lending Rate) tracks how much it costs banks to borrow money, and it eased slightly to 8.45% in December 2025. Similarly, the rate banks pay on fresh term deposits (money saved for a set time) also went down to 5.59%.
Outstanding Deposit Rates
The rate banks pay on existing savings accounts (outstanding deposits) decreased from 6.78% to 6.73% during the same period. This reflects the overall trend of lowering interest rates across the banking sector.
Understanding these rates is crucial for businesses and investors considering loans or savings options within the Indian economy.
