Which of the following new method is introduced by the RBI to calculate banks lending rate to borrowers?
Which of the following new method is introduced by the RBI to calculate banks lending rate to borrowers?
[A]OCLR
[B]MCLR
[C]IMLR
[D]PSLR
MCLR
To ensure better transmission of its rate cut to borrowers, the Reserve Bank of India (RBI) has introduced the Marginal Cost of Funds based Lending Rate (MCLR) to calculate the banks lending rate to borrowers. All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 will be priced with reference to the MCLR method. Currently, many banks follow average cost of funds or ‘blended cost of funds (liabilities) method’ for calculating the base rate. The MCLR methodology will help the borrowers to reap the benefit of lower lending rates. It will also improve transparency in the methodology followed by banks for determining interest rates on advances.
