Indian banks raise deposit, loan rates as borrowing outpaces savings
Business
Banks in India are bumping up interest rates on new fixed deposits and loans because people are borrowing much more than they're saving.
According to the Reserve Bank of India (RBI), the average rate for fresh term deposits hit 5.99% in June 2026, rising steadily from previous months.
Credit growth 18.38% exceeds deposits 13.22%
Credit growth shot up by 18.38% this year, while deposit growth lagged behind at 13.22%.
To keep things balanced, banks also nudged up lending rates a bit: new loan rates reached 8.53% in June.
Private banks especially hiked deposit rates (from 5.94% in May to 6.21% in June) as they competed for big deposits, all part of their effort to keep pace with India's fast-changing financial scene.