New Delhi, Aug. 13 -- RBI issued draft rules on harmonised interest rate directions for all regulated entities to ensure effective monetary policy transmission, appropriate pricing of credit risk, and fair treatment of borrowers. The central bank published the draft guidelines on Wednesday, titled "Reserve Bank of India (Interest Rates on Loans and Advances) Directions, 2026," following its developmental and regulatory policies statement on August 5, 2026.

The proposed directions aim to create a principles-based framework for interest rates on both fixed and floating rate loans. Under the draft framework, effective April 1, 2027, all floating-rate loans will reset within a maximum period of three months. Marginal Cost of Funds Based Lend...