Data Drive: The EBLR link

The shift of the banking sector towards the external benchmark-linked lending rate (EBLR) for all new floating-rate loans has improved the pace and extent of monetary transmission.

As of March this year, 43.6% of the total lending is under the external benchmark as compared to 2.4% in September 2019.

The share of Marginal Cost of Funds based Lending Rate (MCLR) has fallen to 49.2% in March this year from 83.8% in September 2019. Under ELBR, the shift in interest rate cycle will have a quicker impact on both deposit and lending rates of banks.