One-year MCLR falls to 8.61%; fresh FD rates drop to 5.67%
Banks cut their benchmark loan rate and paid less on new fixed deposits in August and September 2026, though the average rate on new loans edged up.
Official title: Lending and Deposit Rates of Scheduled Commercial Banks – September 2026 · Press Release 2026-2027/1224
What happened
Banks' median one-year MCLR, a benchmark many floating-rate loans are linked to, fell to 8.61% in September 2026 from 8.70% in August. The average rate on all existing loans dipped to 8.96% in August from 8.97%. But the average rate on new loans given in August rose to 8.61% from 8.52%, with movements differing across sectors.
On the deposit side, banks are paying less. The average rate on new fixed deposits fell to 5.67% in August from 5.85% in July. The average on all existing deposits slipped to 6.56% from 6.58%.
About 68.2% of floating-rate loans were linked to an external benchmark, usually the RBI repo rate, at end-June 2026, up from 67.6% at end-March. About 29.6% were linked to MCLR.
What it means for you
If your home or personal loan is linked to MCLR, a lower MCLR may ease your EMI at its next reset. Savers face lower rates: new fixed deposits now earn about 5.67% on average, so compare banks before locking in.
What it means for businesses
Borrowers on MCLR-linked loans may see slightly lower rates at reset. Banks' funding costs are falling faster than their loan rates, which supports their margins.
Links in this release, explained
- Lending and deposit rates tables (Excel)
The Excel file with Tables 1 to 9: lending rates by sector and loan type, MCLR across bank groups and deposit rates by maturity.
rbidocs.rbi.org.in/rdocs/content/docs/MLDRSCB30092026ENG.xlsx
Read the original
Press release on rbi.org.in ↗ Official PDF ↗
This explainer simplifies the official text. If anything here differs from the RBI's release, the release is right.