While weight average deposit rates rose for both fresh as well as outstanding deposits, only weighted average lending rates on outstanding deposits rose in December according to the latest data released by the Reserve bank of India.
The weighted average lending rate (WALR) on fresh rupee loans of commercial banks stood at 9.32 per cent in December 2023 from 9.41 per cent in November 2023.
The WALR on outstanding rupee loans was at 9.85 per cent in December 2023 from 9.83 per cent in November 2023
One year median marginal cost of fund based lending rate (MCLR) moved to 8.80 per cent in January 2024 from 8.75 per cent in December 2023.
The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits increased to 6.49 per cent in December 2023 from 6.34 per cent in November 2023.The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits was at 6.83 per cent in December 2023 (6.78 per cent in November 2023.Overall the transmission of policy rates has ganged between 107 basis points to 228 basis points ever since the Reserve Bank started raising policy rates to manage inflation expectations from May 2022. The central bank has cumulatively raised its benchmark policy rates by 250 basis points to 6.5 percent.
“ With banks raising both deposit and lending rates, pace of monetary transmission is picking up again” said Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays. “ Hence, the RBI may see little need to tighten liquidity incrementally either through signaling or outright actions”.
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