The average interest rate charged on newly issued rupee-denominated loans across the banking system increased toward the end of November 2025. The rate rose by 10 basis points, moving from 8.61% in October to 8.71% in November, indicating a gradual tightening of borrowing conditions for new loans. This increase was mainly driven by public sector banks, which raised their lending rates more aggressively during the month. Their average rate on new loans climbed by 16 basis points, reaching 8.05% by the end of November. This suggests that these banks adjusted their pricing in response to higher funding costs, policy transmission, or efforts to protect profit margins. In contrast, private sector banks kept their lending rates unchanged during the same period. Their average rate remained relatively high at 9.44%, indicating that they had already priced in earlier cost pressures or chose to maintain stable rates to remain competitive and support loan demand. Meanwhile, overseas banks operating in the domestic market moved in the opposite direction. Their average lending rate declined by 6 basis points, falling from 8.24% in October to 8.18% in November. This reduction may reflect differences in funding structures, risk appetite, or a strategic move to attract borrowers in a competitive lending environment. Overall, the data shows that the rise in system-wide lending rates during November was uneven across bank categories, with public sector banks being the primary contributors to the increase, private banks holding rates steady, and overseas banks slightly easing borrowing costs. This mixed trend highlights differing strategies and cost conditions within the banking system, even as the general direction of lending rates edged upward.

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