Fresh loan rates rise 21 bps in H1 despite 125 bps repo cut; deposit rates diverge: RBI Bulletin
Economic Times 2 hrs ago·23 Oct 2026, 3:16 pm
The Reserve Bank of India’s recent repo rate cuts have not translated into lower loan rates for new borrowers. According to the latest bulletin, the weighted average lending rate on fresh rupee loans increased by 21 basis points in the first half of the fiscal year, despite a total reduction of 125 basis points by the central bank. This indicates that banks are prioritizing their profit margins over passing on the benefits of lower policy rates to customers.
This divergence occurs because banks are facing significant funding pressure. While credit demand remains strong, deposit growth has not kept pace. Consequently, banks are paying more to borrow funds and are forced to raise loan rates to maintain their net interest margins. For investors, this suggests that banking sector profitability may remain resilient even as the broader economy faces higher interest rates.
Affected stocks
Bearish1 stock
Bull / bear label is derived from the article's AI sentiment — indicative, not advice. Prices may be delayed.
Key takeaways
- Concerns Bank OF India (BANKINDIA).
- Category: Economy.
- AI reads the tone as negative (potentially bearish) for the stock.
- Flagged as a high-impact, market-moving story.
Why it matters
This is a high-impact development for Bank OF India and could move the stock. The tone is negative — watch for downside reaction. Use the price and stock snapshot to gauge how the market is responding.
