Banking · Monetary Policy & Regulations

Given below are an Assertion and a Reasoning statement. Read both and select the correct option: Assertion: Under the RBI regulatory guidelines, banks/mortgage lenders must offer retail individual borrowers the option to switch from a floating rate interest based on internal benchmarks (like MCLR) to an external benchmark-linked rate (EBLR). Reasoning: The Reserve Bank of India mandated the transition to External Benchmark Lending Rates (EBLR) to improve the transparency and transmission of monetary policy, as internal benchmarks were often perceived as slow in passing on rate cuts to borrowers.