BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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linking bank lending rates to a market benchmark
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Merging all the Regional Rural banks
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Dissolving all the Payments banks
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None of the above
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Detailed explanation-1: -Q. What were the recommendation of Janak Raj Committee? Notes: Janak Raj committee set up by the Reserve Bank of India (RBI) in 2017. it recommended linking bank lending rates to a market benchmark.
Detailed explanation-2: -After the introduction of MCLR, RBI was skeptical about the implementation of MCLR by banks. Hence, RBI set up a committee which is known as Janak Raj Committee. Janak Raj Committee came out with certain interesting findings and they are as below. Shifting of loans from BRR to MCLR was not done by all Banks.
Detailed explanation-3: -Hence, considering all these aspects, the Janak Raj Committee recommended banks shifting to external benchmark lending rate rather than internally deciding their own benchmark.
Detailed explanation-4: -Internal benchmark: An internal benchmark is a reference rate for the pricing of rupee loans determined internally by the bank. The PLR, BPLR, the base rate, and the MCLR were internal benchmarks set by each bank for determining the interest rate of loans.