What changed
The weighted average lending rate on fresh rupee loans rose slightly to 8.51% in May from 8.50% in April. The 1-year median MCLR fell to 8.50% in June from 8.65% in May. The share of EBLR-linked loans increased to 67.6% at end-March 2026 from 65.5% at end-December 2025.
What it means for you
Banks are seeing a modest uptick in new loan pricing while outstanding loan rates remain sticky. The MCLR decline signals easing marginal costs, but deposit competition is pushing fresh term deposit rates higher. The shift to EBLR continues, reducing MCLR's influence on floating rate portfolios.
What you must do
- Review your bank's MCLR reset frequency to align with the declining trend.
- Monitor deposit pricing strategies as fresh term deposit rates rise.
- Assess the impact of rising EBLR share on net interest margins.
- Update ALM models to reflect the mixed movement in sectoral lending rates.
Who it affects
All scheduled commercial banks (excluding RRBs and SFBs), Treasury and ALM desks, Retail and corporate lending teams, Deposit pricing committees
What is the current 1-year median MCLR?
It stood at 8.50% in June 2026, down from 8.65% in May 2026.
How has the share of EBLR loans changed?
EBLR-linked loans rose to 67.6% of total outstanding floating rate loans at end-March 2026, up from 65.5% at end-December 2025.
What is the trend in deposit rates?
Fresh term deposit WADTDR increased to 5.84% in May 2026 from 5.79% in April, while outstanding term deposit rates eased to 6.57% from 6.59%.