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Marginal Cost of Funds based Lending Rate (MCLR)

Introduction

Marginal Cost of Funds based Lending Rate (MCLR) एक महत्वपूर्ण benchmark है, जिसका उपयोग banks loans की lending rates तय करने के लिए करते हैं। इसे इस उद्देश्य से लागू किया गया था कि RBI की policy rate में बदलाव borrowers तक तेजी से पहुँच सके।

SBI और IBPS परीक्षाओं में, MCLR से जुड़े प्रश्न आमतौर पर definition-based, purpose-based या Base Rate के साथ comparison-based होते हैं।

Pattern: Marginal Cost of Funds based Lending Rate (MCLR)

Pattern

मुख्य विचार यह है कि MCLR loan interest rates को banks के marginal (latest) cost of funds से जोड़ता है, जिससे lending rates policy changes के प्रति अधिक responsive बनती हैं।

Step-by-Step Example

Question

Marginal Cost of Funds based Lending Rate (MCLR) system क्यों introduce किया गया था?

Options:
A. deposits को insurance cover देने के लिए
B. interest rates को permanently fix करने के लिए
C. policy rate changes की transmission सुधारने के लिए
D. bank mergers को promote करने के लिए

Solution

  1. Step 1: पहले के Base Rate system की समस्या याद करें

    Base Rate system के तहत, RBI की policy rates में बदलाव lending rates में जल्दी reflect नहीं होते थे।

  2. Step 2: MCLR का उद्देश्य पहचानें

    MCLR को policy rate changes की faster और more transparent transmission सुनिश्चित करने के लिए लागू किया गया था।

  3. Step 3: गलत options को eliminate करें

    Deposit insurance, permanent rate fixing और mergers MCLR से संबंधित नहीं हैं।

  4. Final Answer:

    policy rate changes की transmission सुधारने के लिए → Option C

  5. Quick Check:

    Faster RBI rate transmission = MCLR का उद्देश्य ✅

Quick Variations

• प्रश्न MCLR के full form पर हो सकते हैं।

• अक्सर पूछा जाता है: MCLR और Base Rate में अंतर।

• कभी-कभी पूछा जाता है: MCLR के तहत loan rates कितने समय में reset होते हैं (reset period concept)।

Trick to Always Use

  • Step 1 → अगर question loan pricing की बात करे, तो MCLR सोचें।
  • Step 2 → Marginal cost = funds की latest cost।
  • Step 3 → Faster rate transmission → MCLR, not Base Rate।

Summary

Summary

  • MCLR एक benchmark rate है, जिसका उपयोग lending rates तय करने में होता है।
  • यह banks के marginal cost of funds पर आधारित होता है।
  • MCLR, RBI की policy rate changes की transmission को बेहतर बनाता है।
  • इसने पहले के Base Rate system को replace किया।

Example याद रखने के लिए:
“New cost of funds → New lending rate under MCLR.”

Practice

(1/5)
1. The term ‘Marginal Cost’ in MCLR refers to:
easy
A. The latest cost incurred by banks to raise funds
B. Average cost of all past borrowings
C. Administrative cost of bank branches
D. Profit margin added to loans

Solution

  1. Step 1: Understand the word ‘marginal’

    Marginal means the cost of the most recent or additional funds.

  2. Step 2: Link with loan pricing

    MCLR is calculated using the latest cost at which banks raise funds.

  3. Final Answer:

    The latest cost incurred by banks to raise funds → Option A

  4. Quick Check:

    Marginal = newest cost, not past average ✅
Hint: Marginal always means latest, not average.
Common Mistakes: Confusing marginal cost with average cost of funds.
2. MCLR system replaced which of the following lending rate mechanisms in India?
easy
A. Prime Lending Rate (PLR)
B. Base Rate
C. Repo Rate
D. Bank Rate

Solution

  1. Step 1: Recall the earlier benchmark system

    Banks earlier used the Base Rate to price loans.

  2. Step 2: Identify the replacement

    MCLR was introduced to replace the Base Rate system.

  3. Final Answer:

    Base Rate → Option B

  4. Quick Check:

    Base Rate → replaced by MCLR ✅
Hint: PLR → Base Rate → MCLR (chronological memory).
Common Mistakes: Assuming MCLR replaced Repo Rate directly.
3. Compared to the Base Rate system, MCLR makes lending rates:
easy
A. Completely fixed for the entire loan tenure
B. Unrelated to RBI policy rates
C. More responsive to policy rate changes
D. Uniform across all banks

Solution

  1. Step 1: Recall why Base Rate was replaced

    Base Rate was slow in passing RBI rate changes to borrowers.

  2. Step 2: Identify improvement under MCLR

    MCLR ensures quicker transmission of policy rate changes.

  3. Final Answer:

    More responsive to policy rate changes → Option C

  4. Quick Check:

    Faster RBI impact = MCLR advantage ✅
Hint: Speed of transmission differentiates MCLR.
Common Mistakes: Thinking MCLR fixes loan rates permanently.
4. Which authority introduced the MCLR framework in India?
medium
A. Reserve Bank of India
B. Government of India
C. Indian Banks’ Association
D. Ministry of Finance

Solution

  1. Step 1: Identify the regulator of banks

    RBI regulates banking operations and interest rate frameworks.

  2. Step 2: Link with lending rate reforms

    MCLR was introduced as part of RBI’s monetary transmission reforms.

  3. Final Answer:

    Reserve Bank of India → Option A

  4. Quick Check:

    Loan rate framework reforms come from RBI ✅
Hint: Any lending benchmark reform → RBI.
Common Mistakes: Attributing MCLR introduction to the Government.
5. Under the MCLR system, changes in lending rates are usually linked to:
medium
A. Daily stock market movements
B. Annual government budget
C. Customer repayment behaviour
D. Predefined reset periods

Solution

  1. Step 1: Recall how MCLR loans work

    Lending rates are not changed daily.

  2. Step 2: Identify the mechanism

    MCLR-linked loans change rates only at reset periods.

  3. Final Answer:

    Predefined reset periods → Option D

  4. Quick Check:

    No reset = no rate change under MCLR ✅
Hint: Reset period controls rate change timing.
Common Mistakes: Assuming MCLR changes loan rates instantly after every RBI action.

Mock Test

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