Fresh bank deposit and lending rates rise despite RBI’s 125-bps repo cuts

Fresh deposit rates rose 16 bps and fresh rupee loan rates increased 2 bps in June, even after 125 bps of RBI repo cuts since February. With credit growing 19.3% year on year by July-end, financing costs may remain a watchpoint for Indian consumers and retailers.

— Source publishedTue, 25 Aug, 2026, 20:05 IST·First seen Tue, 25 Aug, 2026, 20:12 IST·Source The Hindu BusinessLine

What happened

Reserve Bank of India · RBI said fresh deposit and lending rates hardened despite 125 bps of repo cuts, while bank credit growth remained robust. Retail and

Key facts

  • Fresh deposit WADTDR: +16 bps in June 2026; +4 bps in May 2026
  • Fresh rupee loan WALR: +2 bps in June 2026; +1 bp in May 2026
  • One-year MCLR: -15 bps in June 2026; +10 bps in May 2026
  • Cumulative repo rate cuts: 125 bps, February-June 2026
  • Bank credit growth: 19.3% year-on-year as of July 31, 2026
  • Bank deposit growth: 15.4% year-on-year as of July 31, 2026

Why this matters

Higher market borrowing costs despite policy easing could reduce deal returns and favor acquisitions financed with internal cash or disciplined structures.

What to watch

  • Monthly fresh rupee loan WALR and deposit WADTDR trends versus further RBI policy easing.
  • Retail credit growth, especially unsecured personal loans, credit-card balances, consumer-durable finance and vehicle loans.
  • Bank and NBFC lending standards, loan approval rates, risk-based pricing and reported delinquency trends.
  • High-frequency retail indicators: same-store sales, footfall, conversion, average transaction value and EMI share of sales.
  • Retailer commentary on promotional spending, inventory turns, franchisee liquidity and vendor payment cycles.
  • Inflation, wage growth and festival-season demand, which will determine whether households can absorb sticky financing costs.
  • Prioritize value, essentials and affordable pack-size assortments while maintaining selective premium offerings for higher-income consumers.
  • Expand issuer-bank, NBFC and UPI-linked installment programs, but monitor subsidy costs, approval rates and delinquencies closely.
  • Tighten inventory planning in big-ticket discretionary categories; favor shorter replenishment cycles and demand-led purchase orders.
  • Review working-capital exposure for franchisees, distributors and smaller suppliers that may face persistently high borrowing costs.
  • Prepare festive-season promotions around EMI affordability, exchange offers and cash-back rather than broad-based markdowns.