Question

The Reserve Bank of India (RBI) recently released the final guidelines on computing
interest rates on advances based on which method?
a) The Marginal Cost of Funds Methodology
b) Base Rate Methodology
c) Benchmark Prime Lending Rate Methodology
d) Asset Liability Management Methodology ​

Answer 1

Explanation:

The marginal cost of funds shall comprise of Marginal cost of borrowings and return on networth. The detailed methodology for computing marginal cost of funds is given in the Annex. The marginal cost of funds arrived at (iii) above shall be used for arriving at negative carry on CRR.