MUMBAI, Dec. 6 -- In a bid to bring transparency into loan pricing, the Reserve Bank of India (RBI) on Wednesday said all banks will have to link floating rate loans to external benchmark rate and do away with marginal cost of funds based lending rate (MCLR).

From April 1, 2016, all new floating rates for home loans, personal loans and auto loans will be benchmarked to repo rate, 91-day treasury bills yield produced by the Financial Benchmarks India Pvt. Ltd (FBIL), 182-day treasury bill yield produced by the FBIL or any other benchmark market interest rate produced by the FBIL. According to the central bank, the spread over the benchmark rate-to be decided wholly at banks' discretion at the inception of the loan-should remain unchanged th...