India’s central bank, the Reserve Bank of India (RBI), has released the latest data on lending and deposit rates for Scheduled Commercial Banks (SCBs) as of May 2025. This monthly update provides key insights into how banks are pricing loans and deposits, a critical indicator of the overall direction of interest rates in the economy.
In this article, we break down the latest trends in Weighted Average Lending Rate (WALR), Marginal Cost of Funds based Lending Rate (MCLR), and Weighted Average Domestic Term Deposit Rate (WADTDR).
Key Highlights – May 2025
Lending Rates
1. WALR on Fresh Rupee Loans
- April 2025: 9.26%
- March 2025: 9.35%
- Change: 9 bps decrease
The Weighted Average Lending Rate (WALR) on new rupee loans has seen a noticeable dip, indicating that banks are lowering interest rates on fresh credit due to improving liquidity or softer monetary policy expectations.
2. WALR on Outstanding Loans
- April 2025: 9.70%
- March 2025: 9.77%
- Change: 7 bps decrease
A reduction in WALR on outstanding loans suggests that the average cost of borrowing for existing customers is falling, potentially due to rate resets or ongoing loan repricing by banks.
3. 1-Year Median MCLR
- May 2025: 8.95%
- April 2025: 9.00%
- Change: 5 bps decrease
The Marginal Cost of Funds-based Lending Rate (MCLR), which serves as a benchmark for various loan products including home and auto loans, has marginally decreased. This reflects a more accommodative interest rate environment.
Deposit Rates
4. WADTDR on Fresh Term Deposits
- April 2025: 6.30%
- March 2025: 6.65%
- Change: 35 bps decrease
Fresh deposits are fetching lower rates, which may affect short-term savings products like fixed deposits (FDs). Banks seem to be discouraging aggressive deposit mobilization, possibly due to sufficient liquidity buffers.
5. WADTDR on Outstanding Term Deposits
- April 2025: 7.01%
- March 2025: 7.03%
- Change: 2 bps decrease
While the drop is marginal, it signals that banks are gradually aligning existing deposit interest rates with market conditions.
What These Trends Mean for You
For Borrowers:
- Loan rates are trending down, particularly for new borrowers.
- This is a good time to compare lending rates for home loans, personal loans, and MSME financing.
- Check your bank’s MCLR-linked or external benchmark-linked lending rates for potential savings.
For Depositors:
- New term deposits will earn lower interest compared to earlier months.
- Consider laddering FDs or investing in longer tenures to lock in slightly better rates.
- Explore alternate investment options like government bonds or tax-saving instruments.
Why RBI Publishes These Rates
RBI’s regular updates on lending and deposit rates are crucial for:
- Monitoring monetary transmission
- Assessing banking sector health
- Enabling consumers to make informed financial decisions
- Guiding policymakers and economists
These indicators help track whether changes in the RBI repo rate are being passed on effectively to borrowers and depositors.
Download the Full Data
You can access the complete tables and historical comparisons here:
👉 MLDRSCB30052025.xlsx
Final Thoughts
The May 2025 RBI report reveals a softening interest rate trend across both lending and deposit sides for Scheduled Commercial Banks (excluding RRBs and SFBs). While this is positive for borrowers, depositors may need to recalibrate their saving strategies.
Stay updated with Banking Insights for monthly RBI reports, rate alerts, and expert breakdowns.
Subscribe for More
Want to receive RBI updates and banking insights directly in your inbox?
Subscribe to our newsletter now!