The Reserve Bank of India (RBI) directed banks to link all the new floating-rate loan to medium enterprises with external benchmark. It will be effective from 1 April 2020. The floating rate loans of the micro and small enterprises are already linked with external benchmarks.
Aim:
The move by RBI is aimed to further strengthen the monetary policy transmission. The benefits of a reduction in key lending rates can be passed on to medium enterprises.
Highlights:
♦ The external benchmarks will include RBI repo rate, Treasury bill yields, and the market interest rate published by the Financial Benchmark India Private Ltd (FBIL).
♦ The floating rate loans to micro and small enterprises, personal and retail loans have already been linked to external benchmarks.
♦ RBI states that the monetary policy transmission has improved in respect of the sectors where new floating rate loans have been linked to external benchmarks.
No comments:
Post a Comment