India Financials: RBI Press Meet: No major changes for NBFCs in the review of guidelines on interest rate on advances

Research evidence excerpt

M

Update

August 5, 2026 07:42 AM GMT

India Financials | Asia Pacific

Morgan Stanley India Company Private Limited+

Subramanian Iyer

Equity Analyst

RBI Press Meet: No major

changes for NBFCs in the review

of guidelines on interest rate on

advances

Key Takeaways

In its monetary policy statement, the RBI indicated a review/rationalization of the

Kushan Parikh, CFA

Equity Analyst

Sakshi V Chaplot

Research Associate

India Financials

Asia Pacific

Industry View

Attractive

interest rate framework for all regulated lending entities.

It proposed to: 1) harmonise the guidelines across regulated lending entities while

maintaining proportionality;

2) address certain operational aspects of the current framework on MCLR and

EBLR; and

3) standardise certain divergent market practices concerning interest charging,

including day count convention and benchmark reset dates.

Its aim is to ensure uniformity, enhance transparency in loan pricing, strengthen

monetary transmission and improve consumer protection.

In its press meet, in response to questions on whether we should expect major

changes for lenders, especially for NBFCs, the RBI clarified that there is no major

change for NBFCs and that it is only a rationalization of the existing guidelines. The

focus of this exercise is on ensuring transparency and conduct with regard to

lending rates. The RBI will put out a detailed draft guideline document for public

comments.

We note that in recent years the RBI's supervisory function has driven significant

changes in communication and application of lending rates and fees (including

reduction) across many individual NBFCs. We await the final guidelines.

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