New Delhi, March 20 -- As a personal loan or home loan borrower or as an investor planning to put money into the business, you will be curious to know certain key metrics that may impact the cost of borrowing. The Reserve Bank of India (RBI) has introduced certain metrics to understand the cost of borrowing conveniently for both borrowers and investors while aiming to bring transparency to the Indian banking system. The marginal cost of funds-based lending rate (MCLR) is one such measure introduced by the RBI.

The marginal cost of funds-based lending rate (MCLR) is the minimum rate at which banks are not allowed to lend. It sets the floor for interest rates charged by banks on loans. Hence, when the MCLR increases, interest rates on loan...