RBI Governor Sanjay Malhotra, while announcing the August monetary policy decisions on Wednesday (August 5), said the move is aimed at bringing greater consistency in the way lending rates are regulated across banks and non-banking financial companies (NBFCs).
The RBI’s move comes amid the evolving lending landscape, where banks and NBFCs follow different regulatory frameworks for setting and communicating interest rates on loans.
The central bank will issue detailed guidelines separately, the governor said.
Malhotra also highlighted that India’s macroeconomic fundamentals remain strong, supported by steady growth, stable inflation, healthy financial institutions and adequate foreign exchange reserves.
The proposed harmonisation of interest rate norms is expected to provide borrowers with greater clarity on loan pricing mechanisms and improve comparability of lending rates across regulated entities.
The RBI has been focusing on improving transparency in retail lending practices. Earlier, the central bank had introduced guidelines on external benchmark-linked lending rates for banks to ensure quicker transmission of policy rate changes to borrowers.
