New Delhi: The Reserve Bank of India (RBI) today ruled that all the banks will now follow a new and uniform methodology from April next year. The announcement will come into effect after the calculating the base rate as per marginal costs of fund.
“Apart from helping borrowers reap the benefit of lower rates, it would also improve transparency in the pattern followed by banks for determining interest rates on advances’, a RBI press release said.
“The guidelines are also expected to ensure availability of bank credit at interest rates, which are fair to the borrowers as well as the banks,” reports PTI.
All sanctioned and credit limits renewed will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes. As per RBI guidelines, these changes will be in effect from April first 2016.
The State Bank of India today welcomed the new RBI guidelines, saying that the domestic banking sector has moved closer to global practices.
“Though the Reserve Bank directive on the new pricing methodology is for fresh loan pricing only, existing SBI customers could migrate to the latest system,” said Chairperson, SBI, Arundhati Bhattacharya.