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Under MCLR, lending rates for borrowers generally change:

medium Q4 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
Under MCLR, lending rates for borrowers generally change:
AEvery day automatically
BWhenever RBI changes repo rate
CAt the discretion of bank managers
DOnly on the loan’s reset date
Step-by-Step Solution

  1. Step 1: Understand MCLR-linked loan structure

    MCLR loans have predefined reset periods.

  2. Step 2: Identify when rate changes apply

    Rate changes take effect only on reset dates.

  3. Final Answer:

    Only on the loan’s reset date → Option D

  4. Quick Check:

    No reset date = no rate revision ✅
Quick Trick: Reset period controls timing of MCLR changes.
Common Mistakes:
MISTAKES
  • Expecting instant rate change after RBI action.
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