Banks opposed to changes in MCLR calculation: Reserve Bank of India

The banks proposed, that more "ideal benchmark could be constructed based on deposit rates of the banking system as a whole".

Banks are opposed to the move to link marginal cost-based lending rate (MCLR) to an external, market-linked benchmark, the Reserve Bank of India (RBI) has revealed in a rare dissemination of feedback on its website.

While it is standard practice for RBI-appointed committees to prepare their reports and seek feedback, those are not publicly disclosed, except in this case. 

The internal study group, looking at the issue of effective monetary transmission, proposed in October 2017 that banks must take into account either of the three external benchmarks — the treasury bill rate, the certificate of deposit (CD) rate and the RBI’s policy