Good news for borrowers: Banks cut loan rates again

Business Sep 30, 2025

If you've got a loan or savings account, here's some good news: RBI's latest report shows banks in India made tiny cuts to both lending and deposit rates this August.
The average interest rate on new loans dropped from 8.81% in July to 8.75%, and existing loan rates eased too.

What about main MCLR benchmark?

But the main MCLR benchmark stayed steady at 8.60% for September, so don't expect massive changes overnight.

Floating-rate loans now account for 2-thirds of all loans

More borrowers are seeing their loan interest tied directly to external benchmarks—now nearly two-thirds of floating-rate loans use them, up from earlier this year.
On the flip side, new term deposit rates slipped slightly to 5.56%, with existing deposits also nudging lower, which means savers might see a bit less interest coming in for now.