Economy
Is money cheap, and is it reaching borrowers?
The RBI's repo rate is 5.50% after a rise in Oct 2026, about above inflation of 4.8%. Banks have surplus cash, and bank credit is growing 19.4% a year, up from 10.4% a year ago. Since loans were linked to outside benchmarks in 2019, rate moves reach new loans faster, though not more fully.
Written for anyone who wants to know what money costs in India, whether banks are lending, and how much a repo move matters. Data to 23 October 2026.
Money is cheap and plentiful, and borrowing has picked up. The RBI has begun to raise rates.
The RBI raised its repo rate, the rate at which it lends to banks overnight, by 0.25 points to 5.50% in Oct 2026, its first increase since Feb 2023. In four moves from Feb 2025 to Dec 2025 it had cut the rate by 1.25 points. Consumer prices rose 4.8% in the year to Aug 2026, so even after the increase the repo rate is 0.68 points above inflation. Since 2012, the real repo rate has usually been about 1.0%: by that yardstick money is cheap.
There is plenty of it. Banks have had more cash than they need every day for 115 days, since 30 June 2026, and park the surplus with the RBI; in Oct 2026 it averaged 1.1% of their deposits, against 0.7% in a typical month since 2018. Measured each day against the repo rate then in force, overnight money between banks (the call rate) traded close to it on average in Oct 2026, after 17 basis points below it the month before.
Borrowing has picked up. Bank credit grew 19.4% in the year to Sept 2026, against 10.4% a year earlier and a median of 14.9% since 2001; deposits grew 17.8%. Lending to agriculture rose 17.2%, to industry 18.2%, to services 24.3% and to individuals 16.9%.
The cut reached borrowers quickly but not fully. By Aug 2026, the average rate on new bank loans had fallen 72 basis points, 58% of the repo's 1.25 points, and the rate on new term deposits 95 basis points (76%). New-loan rates kept pace with the repo in this cycle, against 8 months and 6 months in the two easing cycles that began before October 2019, when banks had to start linking new floating-rate loans to an outside benchmark. Yet more of a cut used to arrive in the end: six months after the last move, 95% of the 2015-17 cuts had reached new loans, against 64% in 2025. We had predicted the opposite.
Scorecard
Nine readings, each against its own history: policy and market rates from 2001 (the call rate from May 2011, when the RBI began to run the corridor it runs now), lending rates on new loans from 2014, banks' surplus cash from 2018.
usual range: the middle half of all readings latest Each line runs from the lowest reading to the highest.
This month
5.50%repo rate from 9 October 2026
The RBI raised the repo rate by 0.25 points. In Oct 2026 the call rate averaged 4 basis points above the repo rate in force each day, and banks' surplus cash fell to 1.1% of deposits from 2.8%.
This cycle
58%of the 2025 cuts reached new loans
The repo rate moved 1.25 points from Feb 2025 to Dec 2025; new-loan rates moved 72 basis points by Aug 2026 and new-deposit rates 95 basis points. Loans already on the books moved 91 basis points.
This decade
11.1%credit growth a year, 2016 to 2026
Against 17.2% in the decade before. The repo rate averaged 5.55% over the ten years, against 7.12% before, and the real repo rate 1.0% against −1.2%. Over the decade since the RBI began targeting inflation, money has been cheaper in rupees but dearer after inflation.
The price of money
What matters to a borrower or a saver is the repo rate after inflation. It averaged 1.0% over the last ten years. In Aug 2026, with inflation at 4.8% and the repo rate at 5.25%, it was 0.4%, down from 3.4% a year earlier, when inflation was unusually low.
The repo rate after inflation
Month-end repo rate less consumer price inflation over the year, monthly from 2012.
How to read it. Above zero, the RBI's rate is higher than inflation and money is dear in real terms; below zero, a borrower repays less in real terms than was lent. Inflation moves this line more often than the RBI does.
Loading chart…
Cash in the system
The repo rate is a target. Whether money trades near it depends on how much cash banks hold. When they have more than they need, they park it with the RBI and overnight rates sink toward the floor of the RBI's corridor; when they are short, they borrow from it. Banks have been in surplus on 92% of days over the last year.
Banks' surplus cash with the RBI
Monthly average of the RBI's net absorption from banks (positive) or injection into them (negative), as a share of deposits, from 2018.
How to read it. Above zero, banks have spare cash and money is easy to come by; below zero, the RBI is lending to the system to meet a shortage.
Loading chart…
Does a repo move reach borrowers?
Each line restarts with a rate cycle and shows how far a rate had moved since the month before the cycle's first repo change. Count the months a rate took to make up half the repo's move, less the months the repo itself took, and new-loan rates trailed by 8 months in the 2015-17 easing, 1 month in the 2018 tightening and 6 months in the 2019-20 easing. Since external benchmarks, they trailed by 3 months in the 2022-23 tightening and 0 months in the 2025 easing.
How far each rate had moved, cycle by cycle
Change since the month before each cycle's first repo move, in basis points (100 = one percentage point). New-deposit rates are published from 2020.
How to read it. Where the coloured line tracks the grey one, banks passed the repo move straight on. A gap that stays open is the part of the move that did not reach that rate before the next cycle began.
Loading chart…
Who is borrowing
Bank credit by sector, growth on a year earlier, in Aug 2026 and a year before. Loans to NBFCs, the finance companies that lend on to households and small firms, grew 37.5%, and loans against gold jewellery 83.2%.
Bank credit growth by sector
Growth on a year earlier, selected banks' returns (about 95% of bank credit). Not adjusted for the July 2023 HDFC merger, which has dropped out of both years.
How to read it. Personal loans include home loans; services include loans to NBFCs. Where this year's bar is longer than last year's, that kind of lending has picked up.
Loading chart…
Credit against deposits
Bank credit and deposits in detail
Banks lend mostly what they raise as deposits. When credit outgrows deposits for long, banks must pay more for deposits or borrow elsewhere, and lending rates rise. Banks have lent 81% of their deposits, close to the most since 2001.
Bank credit and deposit growth
All scheduled commercial banks, growth on a year earlier, last reading in each month. RBI's ex-merger figures from July 2023 to June 2024.
How to read it. When the credit line runs above the deposit line, banks are lending faster than they are raising money, and the credit-deposit ratio climbs.
Loading chart…
Financial conditions
How the index is built, and what moves it
One number for the cost and ease of finance: money-market rates, bond yields, lending rates, share prices and the rupee, each against its own history. In Aug 2026, the latest month all its parts report, it stood at −0.74, looser than in 91% of months since 2014. A first reading for Sept 2026, from three of its five parts, is −0.13.
Tipsheet financial conditions index
Monthly from 2014. Above zero, finance is tighter than usual; below, looser.
How to read it. Built from market prices and rates, the index reacts within the month. In our pre-registered tests it did not foretell industrial output or credit growth.
Loading chart…
What the numbers can't tell you
- The new-loan rate is an average across loans
- It moves when banks reprice and also when the mix of new loans changes: a month heavy with gold loans or corporate loans can shift it without any change in pricing. More.
- Few cycles to learn from
- Lending rates on new loans start in late 2014, deposit rates on new deposits in late 2020. That gives five completed rate cycles for loans and two for deposits: enough to describe, too few to test with confidence. More.
- Liquidity matters as much as the repo
- Transmission was fast in 2020 partly because the RBI flooded banks with cash, and slow in 2013-14 because it squeezed them. A repo move with the wrong liquidity behind it does less.
- Credit growth is RBI's provisional figure
- From December 2025 RBI compares month-end figures with the last reporting fortnight a year before, so a year-on-year rate can mix dates up to two weeks apart. Sector figures come from selected banks and are not adjusted for mergers.
- Where the money goes after NBFCs
- Bank loans to NBFCs are counted as services credit, but NBFCs lend them on to households and small firms. Bank figures alone understate how much individuals are borrowing. More.
- Bond yields are RBI's figures only
- Daily market yields from FBIL, FIMMDA and CCIL are withheld on Tipsheet. Bond charts here use RBI's month-end yields and auction results. More.
What changed
The repo rate rose in Oct 2026. Credit growth picked up to 19.4% in Sept 2026 from 19.1%, and the rate on new loans rose to 8.61% in Aug 2026. Each reading is compared with the month before its latest.
| Measure | the month before | Now | Change |
|---|---|---|---|
| Repo rate (Oct 2026) | 5.25% | 5.50% | up 0.25 points |
| Real repo rate (Aug 2026) | +0.8 pts | +0.4 pts | down 0.4 points |
| Surplus cash, % of deposits (Oct 2026) | 2.8% | 1.1% | down 1.7 points |
| Call rate against repo (Oct 2026) | −17 bps | 4 bps | up 22 basis points |
| 10-year bond yield (Aug 2026) | 6.82% | 6.96% | up 0.14 points |
| Rate on new loans (Aug 2026) | 8.52% | 8.61% | up 0.09 points |
| Rate on new deposits (Aug 2026) | 5.85% | 5.67% | down 0.18 points |
| Bank credit growth (Sept 2026) | 19.1% | 19.4% | up 0.3 points |
| Bank deposit growth (Sept 2026) | 17.8% | 17.8% | up 0.1 points |
The workings
The question
Method
Data
Every chart has a table view, a CSV download and a link to its published JSON. Bundles are listed in data status.