Business

RBI hits out at on MClR, moots external benchmark

PTI

The Reserve Bank on Wednesday flayed lenders for keeping interest rates high and flagged concerns over base rate and marginal cost of fund-based lending rate (MClR), saying these have not improved monetary transmission. An internal RBI group also suggested switching over to an external benchmark in a time-bound manner so that better rates are available to borrowers. “The RBI study group has observed that internal benchmarks such as the base rate/MClR have not delivered effective transmission of the monetary policy,” RBI said in a report today. The group was constituted by RBI to study various aspects of the MClR system from the perspective of improving the policy transmission.