Master Circular on Interest Rates on Advances

India

(enacted in 2007)

Master Circular on Interest Rates on Advances (DBOD.Dir.BC. 6/13.03.00/2007-08), consolidates instructions and guidelines issued to banks by the Reserve Bank of India up to June 30, 2007 on matters relating to interest rates on advances.

This master circular is organized as follows:

  1. Introduction;
  2. Guidelines;
    • 2.1 General;
    • 2.2 Benchmark Prime Lending Rate (BPLR) and Spreads;
    • 2.3 Determination of Benchmark Prime Lending Rate (BPLR);
    • 2.4 Freedom to fix Lending Rates;
    • 2.5. Floating Rate of Interest on Loans;
    • 2.6. Levying of penal rates of interest;
    • 2.7. Enabling clause in loan agreement;
    • 2.8. Withdrawals against uncleared effects;
    • 2.9. Loans under consortium arrangement;
    • 2.10. Charging of interest at monthly rests;
    • 2.11. Zero percent Interest Finance Schemes for Consumer Durables;
    • 2.12. Excessive interest charged by banks; and
  3. Annex.

This Master Circular consolidates the following five circulars:

1. DBOD. Dir. BC. 93/13.03.00/2006-07 07.05.2007
2. RPCD.No.Plan.BC.10856/04.09.01/2006-07 18.05.2007
3. RPCD.No.Plan.BC.84/04.09.01/2006-07 30.04.2007
4. DBOD.Dir (Exp.).BC.No.79/04.02.01/2006-07 17.04.2007
5. DBOD.Dir.BC. 5/13.03.00/2006-07 01.07.2006