What is the marginal cost of lending rate?

The minimum lending rate, below which a bank does not have the permission to lend is known as the Marginal Cost of Lending Rate (MCLR). It was implemented from 1st April, 2016, by the RBI to determine the interest rates for loans. You can read about The Reserve Bank of India: Functions and Composition in the given link.

Further readings:

  1. Non Performing Assets (NPA) – Facts for UPSC GS-III
  2. Monetary Policy – Objectives, Roles and Instruments

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