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Finance & Markets · 3 stories · About 2 minutesPublished 8:18 am IST

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  1. 01Finance & MarketsRBI reports falling bank deposit rates and lower median benchmark lending rateLower deposit rates ease funding costs for banks and drive down internal benchmarks like MCLR.
  2. 09Finance & MarketsRBI reports India's non-food bank credit growth accelerated to 18.8% in August 2026Broad acceleration across heavy industry and services signals expanding corporate capital demand.
  3. 16Finance & MarketsRBI expands Benchmark Issuance Strategy to seven additional states and UTsThe framework enhances transparency and predictable debt supply for institutional investors by distributing issuances evenly throughout the quarter.
Finance & MarketsLead story01 / 16

RBI reports falling bank deposit rates and lower median benchmark lending rate

A Bank of China branch interior showing VIP service counters and desks for customers.
A Bank of China branch interior showing VIP service counters and desks for customers. · Tongpoik EAIgIAm / Wikimedia CommonsCC BY-SA 4.0

What happened

Reserve Bank of India data shows scheduled commercial banks cut fresh term deposit rates to 5.67% in August 2026 from 5.85% in July. The 1-year median Marginal Cost of Funds based Lending Rate fell to 8.61% in September from 8.70% in August. However, average lending rates on fresh rupee loans rose to 8.61% in August from 8.52% in July.

Why it matters

Lower deposit rates ease funding costs for banks and drive down internal benchmarks like MCLR. Yet borrowers face mixed impacts, as fresh lending rates increased despite cheaper deposits. Moreover, because internal benchmarks govern less than a third of floating-rate loans, MCLR cuts offer restricted relief across outstanding credit portfolios.

Bigger picture

Indian banking continues migrating toward market-indexed pricing. By end-June 2026, external benchmark-linked loans rose to 68.2% of floating-rate rupee credit from 67.6% in March, while MCLR-linked loans dropped from 30.2% to 29.6%. This shift leaves overall borrowing costs tied more directly to central bank policy moves than internal bank deposit costs.

Watch next

Monitor the next RBI monthly interest rate release to see if fresh lending rates track lower deposit costs, along with upcoming quarterly updates on EBLR credit share.

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Finance & Markets09 / 16

RBI reports India's non-food bank credit growth accelerated to 18.8% in August 2026

What happened

According to the Reserve Bank of India, non-food bank credit grew 18.8% year-on-year in the fortnight ended August 31, 2026, up from 10.2% a year earlier. Services credit rose 24.3%, supported by NBFCs and commercial real estate, while industrial credit reached 18.2% and personal loan growth reached 16.9%.

Why it matters

Broad acceleration across heavy industry and services signals expanding corporate capital demand. Strong corporate and institutional borrowing offset slowing retail segments—specifically credit card debt and gold loans—maintaining solid balance sheet growth for commercial banks.

Bigger picture

The divergence in consumer lending shows a tilt toward asset-backed borrowing like housing and vehicle loans over unsecured credit. Furthermore, year-on-year figures reflect updated end-of-month reporting definitions introduced under the Banking Laws (Amendment) Act 2025.

Watch next

The RBI's September credit deployment release will show whether rapid growth in industrial and services lending holds through the end of the third quarter.

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Finance & Markets16 / 16

RBI expands Benchmark Issuance Strategy to seven additional states and UTs

The Reserve Bank of India office building located in Mumbai.
The Reserve Bank of India office building located in Mumbai. · Sailko / Wikimedia CommonsCC BY 3.0

What happened

The Reserve Bank of India extended its Benchmark Issuance Strategy to six additional states—Assam, Goa, Haryana, Mizoram, Nagaland, and Tripura—and the Union Territory of Jammu and Kashmir for Q3 FY 2026–27. Expected total market borrowings by state governments and union territories for October–December 2026 will reach ₹3,60,820 crore.

Why it matters

The framework enhances transparency and predictable debt supply for institutional investors by distributing issuances evenly throughout the quarter. Structuring regional borrowing schedules helps mitigate market disruptions and smooth yield volatility during state bond auctions.

Bigger picture

This expansion marks the third phase of an RBI pilot launched in Q1 FY 2026–27 with nine states, which subsequently added nine states and Delhi in Q2. Incorporating nearly all regional governments under a standardized borrowing calendar strengthens institutional public debt management in India.

Watch next

RBI will publish specific auction details two to three days before each sale, confirming participating entities, actual borrowing amounts, and central government approvals under Article 293(3).

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