Floating rate borrowers need easy portability

The external benchmark may not lead to fair pricing as banks can always cut the spread for new customers. But your spread can't change

After much prodding and a nudge from the Supreme court, the Reserve Bank of India (RBI) has finally announced all floating rate loans to individuals and micro and small and medium-scale enterprises will be linked to external benchmarks such as RBI repo rate, 91-day treasury bill rate, 182-day treasury bill rate or any other benchmark published by Financial Benchmark India Pvt Ltd from April 2019. While detailed guidelines are yet to come, it will be interesting to see whether old borrowers will also be allowed to shift to this new benchmark. However, if the past is any indicator, all borrowers