Banks are charging more for their loans than at any time since early 2020.
The weighted average lending rate by scheduled commercial banks on fresh loans increased to 9.45 per cent in January 2024 compared to 9.32 per cent in December 2023. This is close to the October 2023 peak of 9.5 per cent, the highest rate charged on fresh loans in recent months. Private sector banks’ average lending rate for fresh loans came in at 10.28 per cent in January 2024, compared to 10.2 per cent in the month before. Foreign banks charged 9.72 per cent. Public sector banks charged 8.63 per cent.
The Monetary Policy Committee, whose decision shapes how banks lend money and accept deposits, has kept its key interest rate unchanged at 6.5 per cent since early 2023.
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The rate on fresh deposits declined to 6.43 per cent in January 2024 from 6.49 per cent in December 2023. Private banks increased rates on fresh deposits to 5.94 per cent in January, compared to 5.87 per cent in the previous month. Foreign banks offered 6.42 per cent while those owned by the government offered 6.78 per cent.
First Published: Mar 08 2024 | 8:32 PM IST