RBI issues norms for pricing banks’ advances

The Reserve Bank of India (RBI) notified guidelines for banks for pricing their advances with reference to the Marginal Cost of funds based Lending Rate (MCLR). Currently the base rate, the minimum lending rate, is priced with reference to the average cost of funds. Banks may specify interest reset dates on their floating rate loans and they will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR.