RBI Lending and Deposit Rates, October 2026: WALR, MCLR and WADTDR Explained
Every month, the Reserve Bank of India (RBI) publishes data on the interest rates that banks charge on loans and pay on deposits. The release does not make headlines the way a policy decision does, but it shows something useful: how changes in the wider rate environment are actually reaching borrowers and savers.
On 30 October 2026, RBI released "Lending and Deposit Rates of Scheduled Commercial Banks – October 2026". Here is what it says, what the terms mean, and how to read the numbers.
What RBI published on 30 October 2026
The release covers scheduled commercial banks (SCBs), excluding regional rural banks and small finance banks. It presents data received during October 2026 in Tables 1 to 9. Most of the weighted average rates refer to September 2026, while the MCLR figure refers to October 2026.
The numbers at a glance
Lending rates
WALR on outstanding rupee loans: unchanged at 8.96% in September 2026, the same as in August 2026.
WALR on fresh rupee loans: declined to 8.51% in September 2026 from 8.61% in August 2026.
1-year median MCLR: declined to 8.55% in October 2026 from 8.61% in September 2026.
RBI notes that WALR on fresh and outstanding loans showed a mixed movement across sectors in September 2026.
Deposit rates
WADTDR on outstanding rupee term deposits: marginally declined to 6.55% in September 2026 from 6.56% in August 2026.
WADTDR on fresh rupee term deposits: declined to 5.61% in September 2026 from 5.67% in August 2026.
What WALR, MCLR and WADTDR mean
WALR (Weighted Average Lending Rate). The average interest rate on bank loans, weighted by loan amounts. A big loan at a given rate counts more than a small one. RBI reports it separately for outstanding loans (everything already on the books) and fresh loans (new loans given during the month).
MCLR (Marginal Cost of Funds based Lending Rate). An internal benchmark that banks calculate from their own cost of funds and use to price many loans, especially older ones.
Each bank publishes its MCLR for different tenors, such as overnight, one month and one year. The release reports the median 1-year MCLR across banks, the middle value rather than an average.
WADTDR (Weighted Average Domestic Term Deposit Rate). The average interest rate banks pay on term deposits (fixed deposits), weighted by deposit amounts. Like WALR, it is reported for outstanding deposits and fresh deposits accepted during the month.
The word "weighted" matters in all three. These are not the rates you see on a bank's website. They are what borrowers and depositors, as a group, are actually paying and earning.
Fresh vs outstanding: why the two move differently
Notice that the fresh loan rate fell by 0.10 percentage point, while the outstanding loan rate did not move at all. The same pattern shows on the deposit side: fresh deposit rates fell by 0.06 percentage point, while outstanding deposits fell by just 0.01.
This is normal. Fresh rates reflect pricing on new business, so they respond quickly to changes in the rate environment. Outstanding rates include years of older loans and deposits.
A fixed deposit booked two years ago keeps its rate until maturity, and many older loans reset only on fixed dates. So outstanding rates move slowly, and fresh rates show the direction first.
How to read these numbers
A few simple ways to use this release:
Direction of new pricing. Fresh loan and fresh deposit rates both declined in September. That tells you new loans and new deposits were being priced lower than a month earlier.
The gap between loan and deposit rates. By simple subtraction (our arithmetic, not an RBI figure), fresh loan WALR minus fresh deposit WADTDR is 8.51 − 5.61 = 2.90 percentage points for September 2026, compared with 8.61 − 5.67 = 2.94 in August. This is only a rough indicator. A bank's real margin depends on its whole balance sheet, including savings and current accounts.
Borrowers on MCLR-linked loans. If your loan is linked to a bank's MCLR, the rate changes only on its reset date. A lower median MCLR does not change your EMI until that date arrives, and your bank's own MCLR may differ from the median.
Fixed deposit savers. Lower fresh deposit rates mean new deposits were earning less on average than a month earlier. Existing deposits keep their booked rate until maturity.
The same logic of rates resetting over time appears elsewhere in the debt market. For example, see how a floating rate bond coupon reset works, or how T-bill auctions set short-term government borrowing costs.
What this does not tell you
It is an average across banks. Your own bank's rates may be higher or lower.
It excludes some banks. Regional rural banks and small finance banks are not part of this data.
It is backward-looking. Most figures refer to September 2026. They describe what happened, not what will happen.
It does not cover credit risk. For debt instruments, risk is a separate question. SEBI's credit risk-o-meter for debt securities is one place to start on that topic.
FAQ
What is WALR?
WALR is the weighted average lending rate: the average interest rate on bank loans, weighted by loan amounts. RBI reports it for outstanding loans and for fresh loans given during the month.
What was the 1-year median MCLR in October 2026?
According to RBI's 30 October 2026 release, the 1-year median MCLR of scheduled commercial banks declined to 8.55% in October 2026 from 8.61% in September 2026.
Why did fresh rates fall more than outstanding rates?
Fresh rates reflect new loans and deposits priced at current conditions. Outstanding rates include older loans and deposits that keep their original rates or reset only on set dates, so they change slowly.
Does a lower MCLR reduce my home loan EMI immediately?
Not usually. MCLR-linked loans reset on fixed dates in the loan agreement, and your bank's MCLR may differ from the median. Check your loan terms and your bank's published MCLR.
Sources
About the author: Nishi Jain is a full-time trader in Jaipur and ex-JioBlackRock. Updates on Telegram: t.me/nishijain_com
This article is for information and education only. It is not investment advice or a recommendation to buy, sell or hold any security.
