Q. Which of the following is/are type/types of External Benchmark Rates?
1. Repo rate
2. Statutory Liquidity Ratio.
3. Cash Reserve Ratio.
Select the correct answer using the code given below:

[A] 1 only

[B] 1 and 2 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: A
  • The RBI has made it compulsory for banks to link their new floating rate home, auto and MSME loans to an external benchmark so that the borrowers can enjoy lower rate of interest.
  • All new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises extended by banks from October 01, 2019 shall be benchmarked to one of the following:
    • Reserve Bank of India policy repo rate
    • Government of India 3-Months Treasury Bill yield published by the Financial
    • Benchmarks India Private Ltd (FBIL)
    • Government of India 6-Months Treasury Bill yield published by the FBIL
    • Any other benchmark market interest rate published by the FBIL.

Source: Source