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India’s bank lending & deposit rates — how an RBI repo change reaches your EMI

Q: What is monetary transmission, in banking terms?

Monetary transmission is the process by which a change in the RBI policy repo rate flows through to the interest rates banks actually charge on loans and pay on deposits, and then to credit, demand and inflation. BankPulse tracks the lending-side measure -- the Weighted Average Lending Rate (WALR) on fresh rupee loans -- and the deposit-side measure -- the Weighted Average Domestic Term Deposit Rate (WADTDR) on fresh deposits -- against the repo rate. When the RBI hiked the repo by about 250 basis points over FY23, fresh-loan WALR rose from roughly 8% toward 9.4% and fresh-deposit WADTDR from roughly 5% to about 6.9%, showing near-full pass-through with deposits lagging loans.

Q: What are India's current bank lending and deposit rates?

On the latest approximate readings, the Weighted Average Lending Rate on fresh rupee loans of scheduled commercial banks is around 9% and the Weighted Average Domestic Term Deposit Rate on fresh deposits is around 6.9%, leaving a lending-deposit spread of roughly 2 to 2.5 percentage points. These followed the RBI repo rate up during FY23-FY24 and are now easing with the 2025 rate cuts that took the repo to 5.25%. All figures are rounded and approximate and the exact rate on any single product varies by bank, borrower and tenor; see the official RBI source for precise latest figures.

Quick answerMonetary transmission is how the RBI repo rate flows into the rates banks actually charge and pay. The Weighted Average Lending Rate (WALR) on fresh rupee loans is around 9% and the Weighted Average Domestic Term Deposit Rate (WADTDR) on fresh deposits around 6.9% — a lending-deposit spread of roughly 2 to 2.5%. Since 2019, most floating-rate retail loans are tied to an external benchmark (EBLR), so they reprice almost 1:1 with the repo within a quarter; older MCLR loans lag. Figures are official, rounded, approximate and revised periodically; precise latest decimals are pending reviewer confirmation.

The chart shows the repo rate, the fresh-loan WALR and the fresh-deposit WADTDR (%) by fiscal year — the gaps between them are the pass-through and the lending-deposit spread. The table below carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.

Repo rate, lending rate (WALR) and deposit rate (WADTDR), with the spread (%)

Fiscal year	Repo	WALR (fresh loans)	WADTDR (fresh deposits)	Spread	Note
FY21	~4.0%	~8.0%	~5.3%	+2.7%	COVID-era easing -- lending & deposit rates at multi-year lows
FY22	~4.0%	~7.5%	~5.0%	+2.5%	Surplus liquidity keeps fresh-loan rates soft
FY23	~6.5%	~8.9%	~6.5%	+2.4%	250 bps of repo hikes pass through to fresh-loan & deposit rates
FY24	~6.5%	~9.4%	~6.9%	+2.5%	Full pass-through; deposit rates catch up with a lag
FY25	~6.25%	~9.3%	~6.9%	+2.4%	Cycle peak holds; easing begins late in the year

Metric: representative RBI policy repo rate; Weighted Average Lending Rate on fresh rupee loans and Weighted Average Domestic Term Deposit Rate on fresh rupee deposits of scheduled commercial banks (RBI monetary-transmission data). The spread is WALR minus WADTDR. All figures are rounded and approximate; recent years are provisional and revised, and the actual rate on any product varies by bank, borrower and tenor. For exact latest figures see the sources linked below.

EBLR vs MCLR — why some loans reprice faster

Feature	EBLR (external benchmark)	MCLR (internal benchmark)
Benchmark	External, usually the RBI repo rate	Bank’s own marginal cost of funds
Repricing speed	Almost 1:1 with repo, within a quarter	Slower, partial, with a longer lag
Mandated since	Oct 2019 for most new retail & MSME floating loans	Apr 2016 (older system, being phased down)
Effect on transmission	Fast, near-full pass-through	Muted and delayed pass-through

What it means for bankers

Lending and deposit rates are where RBI policy becomes bank economics. The mandatory shift to external benchmarks (EBLR) since 2019 means a repo change now reaches most floating-rate borrowers within a quarter, while term deposits reprice only as they mature — so in an easing cycle the lending-deposit spread tends to compress and squeeze the net interest margin, and in a hiking cycle it can briefly widen. That asymmetry is why banks watch deposit costs (WADTDR) as closely as loan yields (WALR): with the repo cut to 5.25% in the 2025 easing, fresh-loan rates fall faster than the back book of deposits, pressuring margins until deposits reprice. The same dynamic links to the credit-deposit picture — when real deposit returns are thin, mobilising the deposits that fund lending gets harder.

Key terms in this dataPlain-English definitions of the terms behind this dashboard — see the full Indian banking glossary. EBLR · MCLR · Repo rate · Scheduled commercial bank

More live dataExplore BankPulse’s other live RBI dashboards: Repo Rate · Real Deposit Rate · Net Interest Margin · Credit & Deposit Growth.

India lending & deposit rate transmission FAQ

What is monetary transmission, in banking terms?

Monetary transmission is how a change in the RBI repo rate flows through to the rates banks actually charge on loans and pay on deposits. BankPulse tracks the Weighted Average Lending Rate (WALR) on fresh rupee loans and the Weighted Average Domestic Term Deposit Rate (WADTDR) on fresh deposits against the repo. When the RBI hiked the repo by about 250 bps over FY23, fresh-loan WALR rose from roughly 8% toward 9.4% and fresh-deposit WADTDR from about 5% to 6.9% — near-full pass-through, with deposits lagging loans.

What is the difference between EBLR and MCLR?

EBLR (External Benchmark Lending Rate) and MCLR (Marginal Cost of funds-based Lending Rate) are the two ways banks price floating-rate rupee loans. Since October 2019 most new retail and MSME floating-rate loans must be linked to an external benchmark — usually the repo — so an EBLR loan reprices almost 1:1 with the repo, typically within a quarter. MCLR is an older internal benchmark based on a bank's own cost of funds and reprices more slowly and only partly, so a repo change reaches MCLR loans with a longer lag.

What are India's current bank lending and deposit rates?

On the latest approximate readings, the WALR on fresh rupee loans is around 9% and the WADTDR on fresh deposits around 6.9%, a spread of roughly 2 to 2.5 percentage points. These rose with the repo through FY23-FY24 and are now easing with the 2025 cuts that took the repo to 5.25%. Figures are rounded and approximate; the exact rate on any product varies by bank, borrower and tenor — see the official RBI source for precise latest figures.

Why does the lending-deposit spread matter for banks?

The gap between the average lending rate (WALR) and the average deposit rate (WADTDR) is the raw material of a bank's net interest margin. When the RBI cuts, EBLR loans reprice down quickly while term deposits reprice only as they mature, so the spread can compress and squeeze margins; in a hiking cycle it can briefly widen. Watching WALR and WADTDR with the repo shows whether bank margins are likely under pressure.

Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable lending-rates JSON feed.

Last reviewed 19 Jun 2026 by Vikram Jain

Source: RBI — monetary-transmission data: Weighted Average Lending Rate (WALR) on fresh rupee loans, Weighted Average Domestic Term Deposit Rate (WADTDR) on fresh deposits of scheduled commercial banks, and Monetary Policy Committee repo-rate decisions, rbi.org.in. The spread is computed as WALR minus WADTDR; figures are rounded and approximate and recent years are provisional and revised. We never reproduce source text verbatim. Reviewed by Vikram Jain. Last updated 19 Jun 2026, 15:03 IST.