CapitalVia Research Desk · 2 Nov 2026

Data Story · 2 Nov 2026

Interest rates · RBI data

The RBI cut rates by 1.25 points. New loans got 0.80 points cheaper.

Between February 2025 and March 2026 the repo rate fell 125 basis points. The RBI's own breakdown shows how much of that actually reached the price of a new bank loan. And in October, the cycle turned.

80 of 125 bps

Of the RBI's 125 bps of cuts, banks passed 80 bps through as lower prices on fresh loans. That's 64%.

Where the 125 basis points went

Average rate on fresh rupee loans from scheduled commercial banks, Feb 2025 to Mar 2026

RBI cut its repo rate by125 bps

Average new-loan rate fell by93 bps

…of which banks actually cut prices80 bps

…and the loan mix shifted to cheaper loans13 bps

Policy cut Real price cut Mix effect (not a price cut)

The "mix effect" means more lending went to banks and sectors that already charge less. The average fell, but nobody's rate was cut by it.

45 bps

of the 125 bps cut, about 36%, had not shown up as a lower price on new loans by March 2026.

Now the cycle has turned

The policy repo rate

Before Feb 2025

6.50%

Start of the cutting cycle

After Mar 2026

5.25%

After 125 bps of cuts

7 Oct 2026

5.50%

First hike, +25 bps

The MPC said "rate cuts are off the table in the near term" and that the next move "can only be a rate hike or a pause". It expects CPI inflation to average almost 5.8% over the next three quarters.

Old money versus new money

Average bank rates, September 2026: what existing customers pay or earn vs. what new ones get

Loans

New loans are 0.45 points cheaper than the average existing loan

Existing loans

8.96%

New loans

8.51%

Term deposits

New FDs pay 0.94 points less than the average FD already on the books

Existing FDs

6.55%

New FDs

5.61%

Bars share one scale (0–9.6%). The gap between new and existing rates is about twice as wide for deposits (0.94 points) as for loans (0.45 points).

What it means for you

Salaried borrowers

The average existing loan costs 8.96%, the average new one 8.51%. If your floating-rate loan hasn't been repriced since the cuts, ask your bank what new borrowers in your category pay. Rates are rising again.

Savers

An FD that matures now renews at today's rates, which average about 0.94 points below older deposits. If the RBI keeps raising, new-deposit rates could move up too.

Founders & CFOs

Plan for borrowing costs to stop falling. The cheap-credit tailwind from 2025-26 was smaller than the headline cut suggested, and the RBI now says cuts are off the table.

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