RBI's loan pricing proposal: How might it impact borrowers?

RBI loan pricing proposal: The Reserve Bank of India (RBI) has proposed a new framework for loan pricing. Its objective is to make changes in floating interest rates, spreads, and total costs more transparent for borrowers of small loans. The draft 'Reserve Bank of India (Interest Rate on Loans and Advances) Directions, 2026' will apply to commercial banks, regional rural banks, co-operative banks, all-India financial institutions, and non-banking financial companies (NBFCs)—including housing finance companies. The proposed directions are set to come into effect on April 1, 2027.

Here are the key proposals that borrowers should be aware of: