Lending Rates Shift as Banks Navigate EBLR Dominance in SCB Sector, RBI Data Reveals
A comprehensive review of lending and deposit rates for Scheduled Commercial Banks (SCBs) reveals a dynamic shift in banking costs and pricing mechanisms. Data released by the Reserve Bank of India (RBI) provides granular insights into these movements across April and May 2026, highlighting the accelerating trend towards External Benchmark Linked Lending Rates (EBLR).Lending Rate Trends and Cost Dynamics
The weighted average lending rate (WALR) on fresh rupee loans by SCBs stood at 8.51 per cent in May 2026. This represents a marginal increase from 8.50 per cent recorded in April 2026, indicating slight upward pressure on newly originated credit.However, the WALR applicable to outstanding rupee loans saw a minor softening, settling at 8.97 per cent in May 2026, down from 8.98 per cent reported the previous month. These movements illustrate a mixed rate environment across different loan segments within the banking sector.
The Median Marginal Cost of Funds based Lending Rate (MCLR) for SCBs was reported at 8.50 per cent in June 2026. This figure reflects a decrease from the 8.65 per cent recorded during May 2026, signaling stabilization or moderation in fund costings.
The Rise of EBLR Linked Loans
A significant trend observed by the RBI pertains to the shift in lending methodology across SCBs. As of March 2026, the share of loans linked to External Benchmark Lending Rates (EBLR) accounted for a substantial 67.6 per cent of total outstanding floating rate rupee loans. This marks an increase from 65.5 per cent reported at the end of December 2025.In contrast, MCLR-linked lending held a share of 30.2 per cent in March 2026. This represents a decline from the 32.0 per cent recorded at the close of December 2025. The data confirms the widespread adoption and growing importance of EBLR among Scheduled Commercial Banks.
Deposit Rate Movements in SCBs
Regarding deposit mobilization, the weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits increased to 5.84 per cent in May 2026. This uptick is relative to the 5.79 per cent recorded during April 2026.The WADTDR for outstanding rupee term deposits, however, showed a slight moderation. In May 2026, this rate stood at 6.57 per cent, marginally lower than the 6.59 per cent reported in April 2026. These deposit rate dynamics provide insight into how SCBs are managing their liability side.
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