08 February 2018

RBI to Link Base Rate with MCLR

RBI to Link Base Rate with MCLR


The Reserve Bank of India will link the base rate with the MCLR from 1st of April 2018 to ensure expeditious transmission of its policy rate to borrowers. The RBI had introduced the Marginal Cost of Funds based Lending Rates (MCLR) system with effect from 1st April 2016, the Central bank observed that a large proportion of bank loans continue to be linked to Base Rate.

According to the RBI Deputy Governor NS Vishwanathan, it has been decided to harmonize the methodology of determining benchmark rates by linking base rate to MCLR as it is more sensitive to policy rate signals.

Static/Current Takeaways Important for Syndicate Bank PO 2018 Exam-
  • Dr Urjit Patel is the 24th Governor of RBI.
  • RBI Headquarters in Mumbai.

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