RBI introduced _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (MCLR) +
Spread system. Banks to calculate on monthly basis. It consists of CRR Cost, Operating Cost, Marginal cost of funds (Repo Rate, Deposit Interest) etc. - Benefits? Better transmission of Monetary Policy; transparency & accountability to borrowers. Although RBI s Janak Raj internal stud group (2017) showed MCLR did not ield all benefits so ne method
2019, 1 st April - NEW loans (not existing loans) to be linked ith _ _ _ _ _ _ _ _ _ Benchmark + Spread s stem. 1 Category of Loans = 1 External Benchmark. - Individual bank free to pick any one External Benchmark such as RBI repo rate (6.50%) or 91-day T-bill yield (6.56%) or 182-day T-bill yield (6.73%) or any other benchmarks by Financial Benchmarks India Pvt. Ltd. - Benefits? Same benefits which MCLR couldn t full deli er.
k is regularly updated. So resultant interest rate may increase or decrease throughout the tenure of loan. Teaser Loan: A sub-type of _ _ _ _ _ _ _ interest rate loan, wherein initial years have low interest, but afterwards- higher interest rate. While RBI has not banned Teaser loans but has put stricter regulations on them from 2011. Benchmark Prime Lending Rate Magical Cost of funds based alending
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