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    Question

    According to the Reserve Bank of India (Interest Rate on Advances) Directions, 2016, banks have the option to consider the outstanding balances of deposits and other borrowings as of which day prior to the date from which the MCLR becomes effective?

    A The same day as the MCLR becomes effective. Correct Answer Incorrect Answer
    B One calendar day before the MCLR becomes effective. Correct Answer Incorrect Answer
    C Three calendar days before the MCLR becomes effective. Correct Answer Incorrect Answer
    D Seven calendar days before the MCLR becomes effective. Correct Answer Incorrect Answer
    E It depends on the bank's discretion. Correct Answer Incorrect Answer

    Solution

    Banks shall have the option to reckon the outstanding balances of deposits and other borrowings as on any day, not more than seven calendar days, prior to the date from which the MCLR becomes effective. The chosen time lag shall be maintained consistently for a period of not less one year.

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