MUMBAI: The Reserve Bank of India (RBI) said on Tuesday fixed-rate loans of up to three years offered by lenders will have to be set based on their marginal
cost of funding, a move an analyst said was negative for the banks. Previously all fixed-rate loans had been exempted from being set on this basis. The tweak will apply to new rules RBI will implement from April 1, which force lenders to base most of their lending rates on their marginal cost of funds and not the average cost of funds currently in use.
Source: The Himalayan Times