Current Affairs · Banking Regulations
What is the regulatory requirement for the 'Blended Interest Rate' in a Co-Lending Arrangement involving a Bank and an NBFC for a retail loan?
- 1The rate is fixed by the RBI every quarter for all co-lending partnerships in the country.
- 2The NBFC is free to charge any interest rate as long as the bank's share is capped at 8 percent.
- 3It is the weighted average of the interest rates charged by the bank and the NBFC based on their respective funding shares.✓
- 4The interest rate must be the same as the bank's base rate for all borrowers.
Correct answer
It is the weighted average of the interest rates charged by the bank and the NBFC based on their respective funding shares.
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