Views of Smt. Arundhati Bhattacharya, Chairman, SBI on RBI’s announcement on Marginal Cost of Funds Methodology for Interest Rate on Advances

“SBI welcomes the final guidelines on marginal cost of funds methodology for interest rates on advances issued today by RBI.The guidelines are to be applied w.e.f. 1st April 2016 on new loans taken thereafter as well as loans getting renewed after that date.. While these guidelines will benefit the new customers, existing customers will also have an option to shift to the new regime with some conditions. Sufficient time has been given to Banks to switch over to the new regime of Marginal cost of funds based Lending Rate as the same has been made effective from 1st April 2016. With Marginal Cost of Funds including tenor premium we have moved closer to international manner of benchmark rates.”