New Delhi, Aug. 27 -- The Reserve Bank of India (RBI) has proposed a new framework aimed at making loan pricing more transparent and helping borrowers compare the actual cost of credit across banks and non-banking financial companies (NBFCs).
Under the draft framework, the central bank plans to bring regulated entities, including commercial and cooperative banks and NBFCs, under a more consistent system for calculating loan spreads and annual percentage rates (APR) from April 1, 2027.
The move comes amid concerns that borrowers often find it difficult to compare loans because lenders follow different approaches when determining the spread charged over benchmark rates. While banks generally link floating-rate loans to external benchmarks, ...