The Reserve Bank of India (RBI) has released the latest data on lending and deposit rates of Scheduled Commercial Banks (SCBs) for May 2026. According to the RBI, the weighted average lending rate (WALR) on fresh rupee loans increased to 8.50% in April 2026 from 8.40% in March 2026. However, the lending rate on outstanding loans remained almost unchanged at 8.98%. The 1-year median Marginal Cost of Funds Based Lending Rate (MCLR), which is used by banks to determine loan interest rates, rose to 8.65% in May 2026 from 8.55% in April.
| Item | Rate |
|---|---|
| Average New Loan Rate | 8.50% |
| Average New Deposit Rate | 5.77% |
| Gap (Spread) | 2.73% |
On the deposit side, banks offered lower interest rates to depositors. The weighted average domestic term deposit rate on fresh deposits declined to 5.77% in April 2026 from 6.07% in March 2026. The rate on outstanding term deposits also fell slightly to 6.59% from 6.62%. The latest data indicates that while loan rates remain relatively high, banks have started reducing deposit rates following recent monetary policy changes.
| Category | Average Rate |
|---|---|
| New Loans | 8.50% |
| Existing Loans | 8.98% |
| New Fixed Deposits | 5.77% |
| Existing Fixed Deposits | 6.59% |
Understand with the help of Example
For example, if a person takes a new loan of ₹10 lakh, the annual interest at 8.50% would be around ₹85,000. On the other hand, a customer who already has a loan may be paying interest at an average rate of 8.98%, which works out to about ₹89,800 per year on a loan of the same amount.
The average interest rate on fresh term deposits was 5.77% in April 2026. This means that a customer investing ₹10 lakh in a new FD would earn around ₹57,700 in interest in one year. However, customers who had opened FDs earlier are earning a higher average rate of 6.59%. For example, an existing FD of ₹10 lakh would generate around ₹65,900 in annual interest.
