Repo rate: loan and deposit rates continue to decline

2024-07-31 17:55:17

Central bank data show that although the transmission of the 250 basis point increase in the repurchase rate since May 2022 is still ongoing, some banks have even continuously lowered their loan and deposit rates.

One basis point is one hundredth of a point.

The weighted average lending rate (WALR) on new rupee loans by commercial banks fell to 9.32% in June from 9.45% in May.

The weighted average domestic time deposit rate (WADTDR) for new rupee time deposits was 6.46% in June 2024, compared to 6.47% in May.

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In June, the WADTDR of Standard Chartered Bank’s outstanding rupee time deposits was 6.91%, while in May 2024 it was 6.93%.

In June 2024, Standard Chartered Bank’s WALR for outstanding rupee loans was 9.91%, up from 9.88% in May 2024.

In July 2024, Standard Chartered Bank’s one-year median marginal cost of funds lending rate (MCLR) remained unchanged at 8.85%.

The trend is significant because the Reserve Bank of India has kept its benchmark repo rate unchanged at 6.5% for more than a year.

The central bank’s official position is that it hopes the rate hike will be fully transmitted, but some market participants also said that the central bank’s liquidity operations secretly contributed to the rate cuts.

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