What the WALR measures
The weighted average lending rate (WALR) on fresh rupee loans is the average interest rate on every rupee loan that scheduled commercial banks sanctioned during a month, with each loan weighted by its amount. A large corporate loan therefore counts for more than a small personal loan. It is a measure of what new borrowers were actually charged, not of the rates banks advertise or of what existing borrowers pay.
The Reserve Bank of India compiles it from returns the banks submit and publishes it each month in a press release, Lending and Deposit Rates of Scheduled Commercial Banks, with a workbook of tables. The same release gives the WALR on outstanding loans, which moves much more slowly because most of the loan book was priced in earlier months, and the banks' marginal cost of funds based lending rates.
What it includes and what it leaves out
The figure on this page is the one for all scheduled commercial banks: public sector, private sector and foreign banks together. The release excludes regional rural banks and small finance banks, and housing finance companies and other non-bank lenders are not banks, so their loans are not in it either. It covers every kind of rupee lending, from working capital for companies to housing, vehicle, education and personal loans. The release also breaks the rate down by sector, so if you want the figure for housing loans alone, the workbook has it.
Because the mix of loans changes from month to month, the WALR can move even when no bank changes a single rate: a month in which more of the lending goes to borrowers who pay lower rates pulls the average down. Read a one-month move with that in mind, and look at the trend over several months.
How it connects to the repo rate
Banks price most new floating-rate loans to individuals and small businesses off an external benchmark, usually the repo rate, under a rule in force since October 2019. A repo change therefore shows up in fresh-loan rates within a few months. Comparing the two charts shows how much of each move in the policy rate reached new borrowers, and how fast.
How to compare it with a quote
A quote for a home loan or a car loan is not directly comparable with the WALR. Your rate depends on the product, your credit score, the loan amount and the lender, and an average across all loan types is not a target any lender prices to. Use the WALR to judge the direction of rates and whether a quote is far out of line with the market, then put your own quoted rate into the loan calculator, the mortgage calculator or the car loan calculator.
When you compare quotes, compare the full cost: processing fees and other charges are not in the interest rate, and on an external benchmark loan the spread over the benchmark is set in your agreement and can change only in the cases it allows.
Reading the chart and the table
Each point is one month, dated the first of the month, at the two decimals the Reserve Bank publishes. The series begins in September 2014, the first month in the Bank's table of fresh-loan rates. Each release carries the whole history, and the latest figures are provisional, so a month can be revised in a later release; this page always shows the figures from the most recent one. The release comes out at the end of the following month, so the newest point is usually about a month old.