<h1>RBI Sets New Guidelines for Banks on Interest Rates Using MCLR, Effective April 1, 2016, to Boost Transparency.</h1> The Reserve Bank of India (RBI) has issued guidelines for banks to compute interest rates on advances using the Marginal Cost of Funds based Lending Rate (MCLR), effective April 1, 2016. These guidelines aim to enhance the transmission of policy rates into bank lending rates and improve transparency in interest rate determination. They are expected to provide fair interest rates for both borrowers and banks, increase competitiveness among banks, and contribute to economic growth. This information was disclosed by a government official in response to a parliamentary question.