RBI unlikely to extend October 1 deadline for repo-linked loans

The RBI is of the opinion that banks already have enough flexibility to introduce a repo-linked loan product

The Reserve Bank of India (RBI) will not extend the October 1 deadline for banks to introduce repo-linked loan products, even as the regulator is open to reviewing the new anchor rate as time progresses, sources familiar with the RBI's working said.

“Nothing is cast in stone, except the October 1 deadline,” said a source.

The RBI has been experimenting with the lending rate format of banks, generally called anchor rate, since 1994, when the directed lending system was wound down, and the rates were let to be decided by competition. The idea has always been that policy rate transmission must get