Question

As per the existing RBI guidelines the minimum interest rate at which banks can lend is called as

Q: Answer-As per the existing RBI guidelines the minimum interest rate at which banks can lend is called as

The marginal cost of funds based lending rate MCLR refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank. The MCLR methodology for fixing interest rates for advances was introduced by the RBI with effect from April 1, 2016.