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Glossary

MCLR (Marginal Cost of Funds based Lending Rate)

An older internal benchmark each bank sets from its own funding costs.

MCLR applied to bank loans from April 2016 until external benchmarks took over in October 2019. It usually resets every six or twelve months and moves more slowly than the repo rate. Borrowers still on MCLR can often switch to their bank's repo-linked rate.

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