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|Yard stick||Base Rate||MCLR|
|Applicability||Rupee loan sanctioned and credit limits renewed on or after 1st July 2010 but prior to 1st April 2016||Rupee Loan sanctioned and credit limits renewed on or after 1st April 2016|
|Elements||Base Rate shall include all those elements of lending rates that are common across all categories of borrowers. RBI prescribes following illustrative list of elements for computing base rate:
1. Cost of Deposits / Funds;
2. Negative carry on CRR and SLR;
3. Unallocatable overhead cost; and
4. Average Return on Net Worth.
|MCLR computation shall necessarily include:
1. Marginal Cost of Funds;
2. Negative carry on account of CRR;
3. Operating costs; and
4. Tenor premium
|Effect on tenor of loan||Base Rate does not change with the tenor of loan||MCLR changes with the tenor of loan|
|Frequency of review||Quarterly||Monthly. Till 31st March 2017, Banks which do not have adequate systems to carry out monthly review, can so do on a quarterly basis.|