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External Benchmarking
April 7 , 2019
1931 days
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- The RBI has shelved indefinitely its proposal to get commercial banks to link their lending rates to an external benchmark like the repo rate or the government treasury bill rate.
- External benchmarking means commercial banks linking the interest rates charged by them on different categories of loans to an external interest rate.
- Benchmarking of a bank’s Interest rate with external rates like repo rate is beneficial for customers of the banks.
- State Bank of India is the only bank that has linked its deposits rate to repo rate.
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