According to the RBI Monetary Policy document, 36 finance companies from 62 banking companies has implemented repo rate as an external benchmark whereas six banks have implemented the market-based criteria such CD rates, 3-month treasury statement etcetera.
The book financial of Asia (RBI) got mandated finance companies to connect interest levels on financing to additional benchmarks. This came into effects from October 1, 2019. Other than the RBI’s repo speed, financial institutions are allowed to connect the interest costs they recharge on loans to other exterior standards for example Treasury costs (T-bill) yields, Mumbai Interbank Outright speed (MIBOR) etc. Continue reading