Which of the following is not a component of

Solution

All of the above are the components of MCLR Negative carry on account of CRR : is the cost that the banks have to incur while keeping reserves with the RBI. The RBI is not giving an interest for CRR held by the banks. Operating cost : is the operating expenses incurred by the banks. Tenor premium : denotes that higher interest can be charged from long term loans Marginal Cost : The marginal cost that is the novel element of the MCLR. The marginal cost of funds will comprise of Marginal cost of borrowings and return on networth.