Lending and Deposit Rates of Scheduled Commercial Banks – October 2026

The article tracks lending and deposit rates at scheduled commercial banks, excluding regional rural banks and small finance banks. It compares September 2026 with August for most measures, while the one-year median MCLR compares October with September. These measures show how banks priced loans and term deposits during the period.

The WALR on outstanding rupee loans was unchanged at 8.96% in September. The WALR on fresh rupee loans fell from 8.61% to 8.51%. The one-year median MCLR declined from 8.61% in September to 8.55% in October. On deposits, the outstanding-term-deposit rate eased from 6.56% to 6.55%, while the fresh-term-deposit rate dropped from 5.67% to 5.61%.

The article also reports mixed movements across lending sectors for fresh and outstanding loans in September. Overall, new loan and deposit pricing softened more clearly than rates on existing balances. That difference matters because existing contracts may adjust more slowly, while new business can reflect current bank pricing sooner.

WALR means weighted average lending rate. It measures the average interest rate charged by SCBs on rupee loans, with loan amounts giving more weight to larger loans. The article reports separate WALRs for fresh loans and all outstanding loans. This helps show both current pricing and the average rate across the existing loan book.

WADTDR means weighted average domestic term deposit rate. It measures the average rate banks pay on domestic rupee term deposits, again distinguishing fresh deposits from outstanding deposits. For example, fresh deposits show current offers, while outstanding deposits reflect balances opened earlier and still held.

MCLR means Marginal Cost of Funds based Lending Rate. It is a bank lending benchmark linked to the marginal cost of obtaining funds. The article reports the one-year median MCLR across SCBs, meaning the middle reported bank rate for the one-year maturity. These definitions use standard banking terminology; the article itself provides the rate names and comparisons, not detailed calculation formulas.

The changes were modest in percentage-point terms but clear in direction. Fresh-loan WALR declined by 0.10 percentage point, from 8.61% in August to 8.51% in September 2026. That equals 10 basis points, since one basis point is one-hundredth of a percentage point. The outstanding-loan WALR did not change and remained 8.96%.

The one-year median MCLR declined by 0.06 percentage point, from 8.61% in September to 8.55% in October. The outstanding-term-deposit WADTDR slipped by 0.01 percentage point, from 6.56% to 6.55%. Fresh-term-deposit WADTDR declined by 0.06 percentage point, from 5.67% to 5.61%.

These figures show that fresh pricing moved more than the outstanding-loan and outstanding-deposit averages. The article describes the lending-rate movement across sectors as mixed in September. Therefore, the headline changes describe SCB-wide averages, not identical movements for every loan category or deposit product.

Fresh rates describe loans or deposits newly issued during the period. Outstanding rates cover the entire existing balance, including contracts created months or years earlier. An average across that larger stock changes slowly because older rates remain part of the calculation. This distinction matters when judging how quickly a rate shift reaches households and businesses.

For example, fresh-loan WALR fell from 8.61% to 8.51%, while outstanding-loan WALR stayed at 8.96%. A new borrower could receive current pricing, but many existing borrowers still had earlier rates in the outstanding-loan average. Similarly, fresh-term-deposit WADTDR fell from 5.67% to 5.61%, while the outstanding figure edged down only from 6.56% to 6.55%.

Loans and deposits also reset on different schedules. Floating-rate loans may reprice at specified intervals, while fixed-rate loans usually do not change before their agreed period ends. Term deposits generally retain their contracted rate until maturity. These timing effects explain the pattern, although the article does not identify specific contract shares or reset schedules.

A lower fresh lending rate can make a newly taken loan cheaper, reducing the interest burden if the borrower qualifies for that pricing. A lower fresh deposit rate has the opposite effect for savers: money placed in a new term deposit, or rolled over at maturity, may earn less. The article reports these average movements for SCBs, not the rate offered to every customer.

The clearest examples are the fresh-loan WALR falling from 8.61% to 8.51% and fresh-term-deposit WADTDR falling from 5.67% to 5.61%. A person taking a new loan could benefit from the lower average lending rate. A depositor renewing a maturing term deposit could receive the lower average return. The actual outcome depends on the product, bank, amount, and customer terms.

Existing borrowers and depositors may not see an immediate change. Fixed-rate contracts can preserve their agreed rate, while floating loans change according to their reset terms. Existing deposits usually keep their contracted rate until maturity. The article establishes the direction of average rates, but it does not quantify household savings, loan payments, or future changes.

Scheduled commercial banks, or SCBs, are commercial banks included in India’s scheduled banking framework. In general, they accept deposits, provide loans, and operate as banking institutions under the applicable regulatory system. The figures here concern SCBs as a defined group, rather than every type of bank operating in India.

The source expressly excludes regional rural banks and small finance banks. Therefore, the reported 8.96% outstanding-loan WALR, 8.51% fresh-loan WALR, and the deposit figures describe the included SCBs only. They should not automatically be treated as averages for the entire banking sector. The article also notes that lending-rate movements varied across sectors.

The article does not explain the reason for the exclusions. A reasonable reporting rationale is that these categories have distinct mandates, customer bases, and business models, so combining them could make comparisons less consistent. That explanation comes from standard banking context, not this article. The safest interpretation is to use the figures only for the stated SCB coverage and exclusions.

Banks accept deposits and use those funds, alongside other funding sources, to provide loans. They pay depositors interest and charge borrowers interest. The difference helps support banking operations and absorb risks. Because deposits are a major funding source, the rates banks pay can affect the rates they need to charge on loans.

If funding becomes more expensive, banks may raise lending rates, reduce deposit rates, or adjust both depending on market conditions. Strong competition for borrowers can push loan rates down. Competition for deposits can push deposit rates up. Monetary conditions also influence the broader cost and availability of funds, which can feed into MCLR and other lending rates.

The article reports outcomes, not causes. Fresh-loan WALR fell to 8.51%, the one-year median MCLR fell to 8.55%, and fresh-term-deposit WADTDR fell to 5.61%. It does not say whether funding costs, competition, monetary policy, or another factor drove these changes. Those mechanisms are established banking principles, so they explain possible channels rather than proving the cause here.