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      Question

      What is the full form of

      MCLR?
      A Marginal cost of loan provision Correct Answer Incorrect Answer
      B Marginal Cost of fund-based lending rate Correct Answer Incorrect Answer
      C Marginal Computation of fund-based lending rate Correct Answer Incorrect Answer
      D Marginal Cost of Lending risk Correct Answer Incorrect Answer
      E None of the above 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. The MCLR shall comprise of: a. Marginal cost of funds; b. Negative carry-on account of CRR; c. Operating costs; d. Tenor premium.

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