Page 54 - Banking Finance October 2019

RBI CIRCULAR

Provided that other existing borrowers shall have the 9. The existing paragraph No. 6(b)(i) of the aforesaid
option to move to External Benchmark at mutually Master Direction stands amended as under:
acceptable terms. All floating rate rupee loans sanctioned and renewed

Provided that the switch-over shall not be treated as a w.e.f. April 1, 2016 shall be priced with reference to
foreclosure of existing facility. the Marginal Cost of Funds based Lending Rate (MCLR)
which will be the internal benchmark for such purposes
4. The existing paragraph No. 2 of the aforesaid Master subject to the provisions contained in paragraph 7 of
Direction is applicable for Small Finance Banks and this Master Direction.
Local Area Banks and the para is amended accordingly.
10. A new paragraph No. 9 (i)(d) is added to the aforesaid
5. The existing paragraph No. 3(a)(iv) of the aforesaid Master Direction as indicated below:
Master Direction stands amended as under:
The periodicity of the reset under MCLR shall
External benchmark rate means the reference rate correspond to the tenor/maturity of the MCLR to which
which includes: the loan is linked.

a. Reserve Bank of India policy Repo Rate 11. The following part of the sub-paragraphs (a), (b), (c) of
b. Government of India 3-Months and 6-Months para 13 of the aforesaid Master Direction as indicated
Treasury Bill yields published by Financial hereunder stands deleted:
Benchmarks India Private Ltd (FBIL) “shall be exempted from being linked to Base rate/
MCLR as the benchmark for determining interest rate’’
c. Any other benchmark market interest rate
published by FBIL. 12. The following part of the paragraph 13(d) of the
aforesaid Master Direction as indicated hereunder
6. Some of the sub-paragraphs of para 4(a) of the
stands deleted:
aforesaid Master Direction stands amended as given “shall be priced without being linked to Base rate/MCLR
hereunder: as the benchmark for determining interest rate’’
(ii) All floating rate loans, except those mentioned in
Section 13, shall be priced with reference to the Yours faithfully,
benchmark indicated in chapter III.
(Dr. S. K. Kar)
(iv) When the floating rate advances are linked to an Chief General Manager
internal benchmark rate, banks shall determine
their actual lending rates by adding the
components of spread to the internal benchmark Banking Promotional Exam sample questions - Series 15
rate. 1. A. Shillong 14. A. Ministry of
(vi) Interest rates on fixed rate loans of tenor below 3 2. D. Both (A) and (B) Commerce and
years shall not be less than the benchmark rate for 3. D. Delhi Industry
similar tenor and shall be as per directions 4. A. Russia 15. D. ONGC
contained in Section 13(d)(v). 16. A. Maharashtra
5. E. None of these
7. A new paragraph No. 4(a)(xi) is added to the aforesaid 6. B. United Kingdom 17. C. USD 500,000
Master Direction as indicated below: 7. E. Rs 1,500 crore 18. D. 6.9%
There shall be no lending below the benchmark rate 8. C. USD 64.37 19. B. Small Finance Bank
for a particular maturity for all loans linked to that 20. A. Rakesh Asthana
benchmark. billion
9. C. Rajiv Kumar 21. C. Ruhan Rajput
8. The existing paragraph No. 6(a)(i) of the aforesaid
10. A. Atanu 22. A. Mayank Agarwal
Master Direction stands amended as under:
All floating rate rupee loans sanctioned and renewed Chakraborty 23. A. Thailand
between July 1, 2010 and March 31, 2016 shall be 11. C. Cafe Coffee Day 24. B. Maldives
priced with reference to the Base Rate which will be 12. B. Economist 25. C. Aishwary Pratap
the internal benchmark for such purposes. 13. A. August 1 Singh

54 | 2019 | OCTOBER | BANKING FINANCE