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The Reserve Bank of India invites public comments on the draft Reserve Bank of India (Interest Rates on Loans and Advances) Directions, 2026. The draft proposes a harmonized, principles-based framework for determining interest rates on fixed and floating rate loans for all regulated entities. This initiative aims to ensure effective monetary policy transmission, appropriate credit risk pricing, and fair treatment of borrowers. The current regulatory framework varies across different types of regulated entities, including commercial banks, non-banking financial companies, and cooperative banks. The Reserve Bank will review the feedback received before it issues final directions for each category of regulated entity. Stakeholders must submit their comments by September 11, 2026, through the Connect 2 Regulate portal or by email.
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August 12, 2026
RBI invites comments on the Draft “Reserve Bank of India (Interest Rates on Loans and Advances) Directions, 2026”
In pursuance of the announcement made in the Statement on Developmental and Regulatory Policies dated August 05, 2026, the Reserve Bank of India has today issued the Draft Reserve Bank of India (Interest Rates on Loans and Advances) Directions, 2026 for public comments.
At present, regulatory framework on interest rate on advances are applicable for Commercial Banks (including Small Finance Banks and Local Area Banks), covering, inter alia, instructions on internal and external benchmark-based lending frameworks for floating rate loans and determination of spreads over such benchmarks. Regulatory instructions on interest rates on loans and advances extended by other REs (i.e., Non-Banking Financial Companies, All India Financial Institutions, Regional Rural Banks, Urban Cooperative Banks, and Rural Cooperative Banks) are largely with regard to conduct related aspects. Further, with respect to Commercial Banks, divergent practices have been observed in certain aspects, including determination of MCLR (internal benchmark) and its components. In addition, the extant guidelines contain very limited regulatory instructions regarding fixed rate loans.
Accordingly, it is proposed to issue harmonised Directions for all REs, prescribing a broad, principles-based framework for the determination of interest rates on both fixed rate and floating rate loans, commensurate with the nature, complexity, and scale of the operations of the REs.
For the purpose of public consultation / feedback, a draft Direction applicable to all REs is being issued. Upon examination of the feedback received, final Directions will be issued separately for each category of RE.
The comments / feedback on the draft Directions may be submitted by the regulated entities and other stakeholders / members of public on or before September 11, 2026 through the following channels: i. The ‘Connect 2 Regulate’ section available on the Reserve Bank’s website; or ᮧेस ᮧकाशनी PRESS RELEASE
भारतीय ᳯरज़वर् बᱹक
RESERVE BANK OF INDIA
0वेबसाइट : www.rbi.org.in/hindi संचार िवभाग, कᱶᮤीय कायार्लय, शहीद भगत ᳲसंह मागर्, फोटर्, मुंबई - 400 001 Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort, ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
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ii. by email with the subject line ‘Feedback on (full name of the draft Amendment Directions)’.
(Brij Raj)
Press Release: 2026-2027/877 Chief General Manager
