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Operational Aspects of Loan Accounts
Which lending-rate benchmark incorporates marginal cost of funds, negative carry on CRR, operating cost, and tenor premium for floating-rate rupee loans?
MCLR (Marginal Cost of Funds Based Lending Rate) is the benchmark that uses these four components to price floating-rate rupee loans sanctioned from April 2016 onwards.
From which date were all new floating-rate rupee loans and limits mandated to be priced at MCLR by RBI?
1st April 2016 (w.e.f. 1.4.2016)
What does 'negative carry on CRR' mean in the context of MCLR computation?
Negative carry on CRR refers to the cost a bank incurs because funds kept as Cash Reserve Ratio with RBI earn zero or below-market returns, and this opportunity cost is factored into the MCLR calculation.
From which date did RBI mandate external benchmark-linked pricing for new floating-rate personal/retail loans and MSME loans?
1st October 2019 (1.10.2019)
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