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      Question

      Which of the following is not a component of M arginal

      Cost of Funds based lending rate (M CLR ), used by the banks to price the loans they extend ? ┬а
      A Marginal cost of funds; Correct Answer Incorrect Answer
      B Negative carry-on account of CRR; Correct Answer Incorrect Answer
      C Credit costs Correct Answer Incorrect Answer
      D Tenor premium Correct Answer Incorrect Answer
      E All are part of MCLR Correct Answer Incorrect Answer

      Solution

      All floating rate rupee loans sanctioned and renewed w.e.f. April 1, 2016 shall be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes subject to the provisions contained in paragraph 7 of this Master Direction. ┬а The MCLR shall comprise of: ┬а a. Marginal cost of funds; ┬а b. Negative carry-on account of CRR; ┬а c. Operating costs; ┬а d. Tenor premium. ┬а

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