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Despite better transmission, MCLR didn’t meet expectations: RBI paper

The marginal cost of funds-based lending rate (MCLR) regime leads to better pass-through of changes in benchmark policy interest rates than the previous base rate regime, a working paper written by the Reserve Bank of India (RBI) staff said. According to the paper, under the MCLR regime, an increase of 100 basis …

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MCLR more effective in policy transmission than base rate regime: RBI paper

The newer marginal cost of funding based lending rate (MCLR) system is more effective than the erstwhile base rate method, a paper by the Reserve Bank of India said on Friday. The paper said that for every 1 percentage point increase by the RBI in its repo rate, the weighted average lending …

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