<div align="justify">Blaming the banks once again for not passing on the entire benefits of rate cuts to borrowers, RBI deputy governor Viral Acharya said that the central bank is considering a new benchmark for better rate transmissions.<br /> <br />"The experience with the marginal cost of funds based lending rates (MCLR) system introduced in April 2016 for improving monetary transmission has not been entirely satisfactory. RBI has constituted an internal study group across several clusters on various aspects of the MCLR system and to explore whether linking of the bank lending rates could be made direct to market determined benchmarks going forward," Acharya said while addressing media persons after the announcement of the third bi-monthly monetary policy.<br /> <br />The group will be submitting its report by September 24 this year, Acharya said, adding that the incremental benefit from MCLR as an alternative to the base rate system was positive.<br /> <br />RBI governor Urijit Patel also acknowledged that borrowers have not benefitted to the full extent on the amount of RBI's rate cuts as banks have been selective in passing on the cuts. "Given the liquidity conditions prevailing and that we have reduced policy rates by a substantial amount since the start of easing cycle, I think there is scope for banks to reduce the lending rate for those segments. So far, they have not benefited to the full extent of our policy rate cuts," Patel said during the post policy briefing.<br /><br /></div>
<div align="justify">Blaming the banks once again for not passing on the entire benefits of rate cuts to borrowers, RBI deputy governor Viral Acharya said that the central bank is considering a new benchmark for better rate transmissions.<br /> <br />"The experience with the marginal cost of funds based lending rates (MCLR) system introduced in April 2016 for improving monetary transmission has not been entirely satisfactory. RBI has constituted an internal study group across several clusters on various aspects of the MCLR system and to explore whether linking of the bank lending rates could be made direct to market determined benchmarks going forward," Acharya said while addressing media persons after the announcement of the third bi-monthly monetary policy.<br /> <br />The group will be submitting its report by September 24 this year, Acharya said, adding that the incremental benefit from MCLR as an alternative to the base rate system was positive.<br /> <br />RBI governor Urijit Patel also acknowledged that borrowers have not benefitted to the full extent on the amount of RBI's rate cuts as banks have been selective in passing on the cuts. "Given the liquidity conditions prevailing and that we have reduced policy rates by a substantial amount since the start of easing cycle, I think there is scope for banks to reduce the lending rate for those segments. So far, they have not benefited to the full extent of our policy rate cuts," Patel said during the post policy briefing.<br /><br /></div>
