RBI data shows faster repo rate cuts to loans than deposits
pre-market1 source ↓written by the desknot a recommendation
- from February 2025
- 125 basis points
- deposit rates
- 78 basis points
- loans dropping
- 82 basis points
The Reserve Bank of India's data reveals that external benchmark-linked lending rates (EBLR) fell by 125 basis points from February 2025 to May 2026, mirroring the repo rate cut. In contrast, banks reduced fresh domestic term deposit rates by 78 basis points. This indicates stronger transmission to lending rates, with the weighted average lending rate (WALR) on fresh loans dropping by 82 basis points.
The slower adjustment in deposit rates highlights ongoing competition among banks for liabilities, despite improved liquidity conditions. This may impact bank profitability and lending growth in the near term.
Not investment advice. For informational purposes only.