Transmission in lending rates continued to be higher than that on deposit rates since the Reserve Bank has been signaling higher rates to rein in inflation within the mandated target of 2-6 percent.While the lending rates rose by 10-26 basis points ( one bps is 0.01 percent) in September. deposit rates rose by only 9 bps during the month. The Reserve Bank has been raising its benchmark policy repo rate-the rate at which it lends to banks since May this year as consumer price inflation has remained above the target band of 2 to 6 percent. It raised repo rates by 50 bps to 5.9 percent when the monetary policy committee met on September30, taking the cumulative rate increase since May to 190 bps.The weighted average lending rate (WALR) on fresh rupee loans of SCBs increased by 26 basis points (bps) from 8.33 per cent in August 2022 to 8.59 per cent in September 2022, according a latest central bank release.The WALR on outstanding rupee loans of SCBs increased by 10 bps from 9.13 per cent in August 2022 to 9.23 per cent in September 2022. While the one year median Marginal Cost of Fund based Lending Rate (MCLR) increased by 15 bps from 7.75 per cent in September 2022 to 7.90 per cent in October 2022.The mandated external benchmark regime introduced in October 2019 for loan pricing in select sectors has strengthened the interest rate channel of monetary transmission. The proportion of outstanding floating rate loans linked to external benchmarks has increased from 9.1 per cent in March 2020 to 46.9 per cent in June 2022. Concurrently, the share of marginal cost of funds-based lending rate (MCLR) linked loans has come down to 46.5 per cent in June 2022, the RBI said in its latest monetary policy report.The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits of SCBs increased by 9 bps from 5.29 per cent in August 2022 to 5.38 per cent in September 2022.