RBI proposes one set of rules on loan interest rates for all lenders, covering fixed and floating loans
The draft Interest Rates on Loans and Advances Directions, 2026 would harmonise the framework for banks, NBFCs, AIFIs, RRBs and co-operative banks. Comments closed on 11 September 2026.
Key facts
- In force
- Draft — not in force
- Who it affects
- Banks, NBFCs and other lenders; borrowers
- What it is
- Comments invited
- Section
- FEMA & RBI
- Published
- 12 August 2026
In 30 seconds
- Draft issued on 12 August 2026, following the policy statement of 5 August 2026.
- Today’s benchmark-based framework applies to commercial banks; for other lenders the rules are largely on conduct.
- RBI noted divergent practices among banks, including in determining MCLR and its components.
- Existing guidelines contain very limited instructions on fixed rate loans.
हिंदी में सार
RBI ने सभी कर्ज़दाताओं — बैंक, NBFC, सहकारी बैंक — के लिए ब्याज दर तय करने के एक समान नियमों का मसौदा जारी किया है, जिसमें fixed और floating दोनों तरह के कर्ज़ शामिल हैं। सुझाव 11 सितंबर 2026 तक माँगे गए थे।
The gap RBI wants to close
At present, the regulatory framework on interest rates on advances — internal and external benchmark-based lending for floating rate loans and the determination of spreads — applies to commercial banks, including small finance banks and local area banks. For NBFCs, All India Financial Institutions, regional rural banks and urban and rural co-operative banks, the instructions are largely about conduct.
RBI also observed divergent practices among commercial banks in certain aspects, including determination of MCLR and its components, and noted that the existing guidelines say very little on fixed rate loans.
What is proposed
Harmonised Directions for all regulated entities, prescribing a broad, principles-based framework for determining interest rates on both fixed rate and floating rate loans, commensurate with the nature, complexity and scale of the lender’s operations. Final Directions will be issued separately for each category of regulated entity.
Status
This is a draft. Comments were invited up to 11 September 2026; final Directions are awaited.
Published 12 August 2026. Updated 8 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.