Divergence Appears as Fresh Lending Rate Rises, Fresh Deposit Rate Falls

Overview • In May 2023, fresh lending rates rose while deposit rates decreased. Meanwhile, rates on outstanding business continued to climb. o The weighted average lending rate (WALR) on fresh rupee loans of SCBs increased by 19 basis points (bps) from 9.08% in April 2023 to 9.27% in May 2023 and the WALR on outstanding rupee loans of SCBs increased by 2 bps from 9.76% in April 2023 to 9.78% in May 2023. o The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of SCBs decreased by 4 bps from 6.36% in April 2023 to 6.32% in May 2023. Meanwhile, WADTDR on outstanding rupee term deposits of SCBs increased by 9 bps from 6.28% in April 2023 to 6.37% in May 2023. o 1-Year median Marginal Cost of Fund based Lending Rate (MCLR) of SCBs increased from 8.60% in May 2023 to 8.65% in June 2023. • The share of External Benchmark based Lending Rate (EBLR) linked loans in total outstanding floating rate rupee loans of SCBs stood at 49.6% at end-March 2023, while share of MCLR-linked loans was 45.5%. Banking_Rate_Tracker_-_May_2023