Overview
- In October 2024, the spread between the outstanding weighted average lending rate (WALR – Lending Rate) and the weighted average domestic term deposit rate (WADTDR – Deposit Rate) for scheduled commercial banks (SCBs) decreased marginally by one basis point (bps) to 2.92%.
- The o/s PSB spread has been compressing over the past year, with a slight sequential decline of 3 bps, touching 2.11% as of October 2024, while the PVBs spread declined by 2 bps and stood at 3.94%.
- The SCBs’ lending rate on o/s rupee loans has remained flat and stood at 9.88%. In contrast, the deposit rate on o/s rupee term deposits rose by 1 bps and stood at 6.96%.
- Meanwhile, the one-year median Marginal Cost of Funds-based Lending Rate (MCLR) increased by 5 bps on a m-o-m basis, to 9.00% as of November 2024 due to the rising cost of deposits and margin pressures impacting NIMs.
- Fresh margins have jumped, indicating that banks as of now have been successful in protecting their margins.
