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The Reserve Bank of India (RBI) has issued harmonised draft directions on interest rates on loans

ICICIdirect Research 13 Aug 2026 DISCLAIMER

News: The Reserve Bank of India (RBI) has issued harmonised draft directions on interest rates on loans, bringing banks, NBFCs and other regulated lenders under a more uniform framework for pricing credit. According to the draft, lenders would be required to disclose their lending rates on the first day of every month, while floating-rate loans would need to be revised at least once every three months to ensure rates reflect prevailing market conditions. The RBI has also proposed greater discipline around spread-setting, with the spread over the benchmark to remain fixed for at least three years in applicable cases, reducing the scope for lenders to selectively alter spreads for new borrowers. The framework also proposes monthly interest compounding/interest calculation at monthly rests and seeks to make external benchmarks mandatory for specified categories of loans.

View: The Reserve Bank of India (RBI) has issued harmonised draft directions on interest rates on loans, bringing banks, NBFCs and other regulated lenders under a more uniform framework for pricing credit. According to the draft, lenders would be required to disclose their lending rates on the first day of every month, while floating-rate loans would need to be revised at least once every three months to ensure rates reflect prevailing market conditions. The RBI has also proposed greater discipline around spread-setting, with the spread over the benchmark to remain fixed for at least three years in applicable cases, reducing the scope for lenders to selectively alter spreads for new borrowers. The framework also proposes monthly interest compounding/interest calculation at monthly rests and seeks to make external benchmarks mandatory for specified categories of loans.

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