Question

    Banks are required to use External Benchmark lending rate for which of the following types of the loans:

    A All new floating rate personal or retail loans (housing, auto, etc.) Correct Answer Incorrect Answer
    B floating rate loans extended by banks to Micro and Small Enterprises from October 01, 2019 Correct Answer Incorrect Answer
    C floating rate loans to Medium Enterprises from April 01, 2020 Correct Answer Incorrect Answer
    D floating rate loans to Medium Enterprises from April 01, 2022 Correct Answer Incorrect Answer
    E All of the above (a, b and c) Correct Answer Incorrect Answer

    Solution

    All new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans extended by banks to Micro and Small Enterprises from October 01, 2019 and floating rate loans to Medium Enterprises from April 01, 2020 shall be benchmarked to one of the following: - Reserve Bank of India policy repo rate - Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL) - Government of India 6-Months Treasury Bill yield published by the FBIL - Any other benchmark market interest rate published by the FBIL.   Banks are free to offer such external benchmark linked loans to other types of borrowers as well.

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