Borrowing got marginally cheaper in September, according to data released by the Reserve Bank of India on Friday, 30 October. The weighted average lending rate (WALR) on fresh rupee loans of scheduled commercial banks declined by 10 basis points to 8.51 per cent in September 2026, down from 8.61 per cent in August.
The figures come from the RBI’s release titled “Lending and Deposit Rates of Scheduled Commercial Banks — October 2026”, which compiles data received from scheduled commercial banks during October, excluding regional rural banks and small finance banks. The release is a monthly window into how banks are actually pricing loans and deposits, as opposed to the policy rates announced by the central bank.
While new borrowers saw rates ease, existing borrowers saw no change: the WALR on outstanding rupee loans remained unchanged at 8.96 per cent in September compared with August. The one-year median marginal cost of funds-based lending rate (MCLR) — the benchmark many older loans are linked to — eased to 8.55 per cent in October from 8.61 per cent in September, a move that could feed through to some existing floating-rate loans in the coming months.
Depositors, meanwhile, saw returns soften slightly. The weighted average domestic term deposit rate on fresh rupee term deposits declined by six basis points to 5.61 per cent in September from 5.67 per cent in August. Rates on outstanding term deposits also eased, continuing a pattern in which banks have been trimming what they pay savers even as they compete for deposits.
The RBI noted that the WALR on fresh as well as outstanding rupee loans exhibited a mixed movement across sectors in September — a reminder that the headline rate is an average across housing, vehicle, personal, agricultural and corporate lending, and that individual borrowers’ experience varies with their loan type and credit profile.
The data lands at a moment when the RBI’s Monetary Policy Committee is meeting, with its repo rate decision awaited on 2 November. The transmission of policy rates into actual lending and deposit rates is one of the central bank’s closest-watched measures, and September’s modest easing in fresh-loan rates suggests that the previous policy moves are still working their way through the banking system.
For borrowers, the practical takeaway is modest but real: new loans priced in September were, on average, 10 basis points cheaper than in August. For savers, the message runs the other way — fresh deposit rates edged down, and shopping around for the best term-deposit rate matters more than ever.
