Private banks' fresh loan rates up 14 bps in September over August

Fresh term deposit rates rise eight bps in Sept; One-yr MCLR flat in October

Fresh loans by private banks in India turned costlier with their weighted average lending rate (WALR) going up by 14 basis points (bps) to 10.33 per cent in September from 10.19 per cent in August.

 

This rise comes amid softening of rates for scheduled commercial banks (SCBs) as a whole by 4 bps to 9.37 per cent in September from 9.41 per cent in August, Reserve Bank of India (RBI) data showed.

 

The WALR for foreign banks’ fresh loans also moved up from 9.35 per cent in August to 9.41 per cent in September. Public sector banks (PSBs) saw their WALR rates dipping from 8.6 per cent in August to 8.57 per cent in September.

 

WALR loan rates on outstanding credit depicted a stable picture with one bps drop from 9.91 per cent in August to 9.9 per cent in September. 

 

The one-year median marginal cost of fund-based lending rate (MCLR) of SCBs remained unchanged at 8.95 per cent in October from September.

 

On deposit rates, RBI said the weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of SCBs rose to 6.54 per cent in September from 6.46 per cent in August.

 

WADTDR on outstanding rupee term deposits of SCBs also moved up to 6.95 per cent from 6.93 per cent.

 

Meanwhile, CARE Ratings said net interest margins (NIMs) of SCBs were almost flat at 2.62 per cent in Q2FY25 against 2.63 per cent in Q1FY25.

 

PSBs saw a downtick of seven bps in NIMs to 2.78 per cent in Q2FY25 from 2.86 per cent in Q1 due to increasing cost of deposits.

 

However, private banks saw NIMs remaining flat at 2.56 per cent in Q2 against 2.55 per cent in Q1 since major transmission of deposit rates was seen in the last few quarters, CARE said.