0 months ago
RBI to standardize lending rate rules for transparency, consumer protection
The Reserve Bank of India (RBI) is the central bank of India — a kind of 'bank for banks.'
It makes rules about how banks lend money to people and businesses.
The RBI has now said it wants all lenders to follow the same rules for setting loan interest rates.
Right now, different banks use different methods and schedules to decide rates, which can confuse customers.
The new rules aim to make loan pricing clearer, fairer, and easier to compare.
The RBI also decided to keep its main lending rate, called the repo rate, unchanged at 5.25%.
The RBI says Indian banks are healthy, with fewer bad loans than last year.
Banks are also lending more money and collecting more deposits than before.
The RBI will publish detailed rules soon and ask people for their opinions first.
RBI Governor Sanjay Malhotra announced plans to harmonise and standardise the regulatory framework on interest rates on advances for all regulated entities.
The proposals address operational aspects of the MCLR and EBLR lending frameworks, including day count conventions and benchmark reset dates, with new norms effective from October 1, 2026.
The RBI's Monetary Policy Committee kept the key policy repo rate unchanged at 5.25%.
Banks' gross NPA ratio improved to 1.68% in June 2026 from 2.22% a year earlier, while outstanding credit grew 18.6% year-on-year.
RBI said draft directions will be issued shortly, with measures aimed at uniformity, transparency, stronger monetary transmission, and consumer protection.
- Who
- RBI Governor Sanjay Malhotra and the RBI's Monetary Policy Committee
- What
- A proposal to harmonise and standardise rules on interest rates on advances across all regulated entities to improve transparency in loan pricing and consumer protection
- Where
- India; announced in Mumbai by the Reserve Bank of India
- When
- Announced Wednesday alongside the monetary policy statement; new norms scheduled to take effect October 1, 2026
- Why
- To bring uniformity in lending practices, standardise divergent market practices such as day count conventions and benchmark reset dates, and strengthen monetary transmission
Key facts
- Central bank
- Reserve Bank of India (RBI)
- RBI Governor
- Sanjay Malhotra
- Repo rate
- Unchanged at 5.25%
- New norms effective from
- October 1, 2026
- Banks' gross NPA ratio (June 2026)
- 1.68%, down from 2.22% a year earlier
- Bank credit growth (June 2026)
- 18.6% year-on-year
- Bank deposit growth (June 2026)
- 13.3% year-on-year
- NBFC gross NPA ratio (June 2026)
- 2.50%, down from 3.09% a year earlier
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India
“"In order to enhance transparency in lending rates and strengthen consumer protection, it is proposed to harmonise and standardise the regulatory framework on interest rates on advances for all regulated entities."”
livemint.com
“"These measures seek to ensure uniformity, enhance transparency in loan pricing, strengthen monetary transmission and bolster consumer protection."”
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