Master Circular – Interest Rates on Advances

DBOD.No.Dir.BC.  15 /13.03.00/2013-14

July 1, 2013
Ashadha  10, 1935 (Saka)

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir / Madam

Master Circular – Interest Rates on Advances

Please refer to the Master Circular DBOD.No.Dir.BC.5/13.03.00/2012-13 dated July 2, 2012 consolidating instructions / guidelines issued to banks till June 30, 2012 on matters relating to Interest Rates on Advances. The Master Circular has been suitably updated by incorporating instructions issued up to June 30, 2013 and has also been placed on the RBI website ( A copy of the Master Circular is enclosed.

Yours faithfully

(Prakash Chandra Sahoo)
Chief General Manager

Encl: as above



Para No.


A Purpose
B Classification
C Previous instructions
D Application
1 Introduction
2 Guidelines
2.1 General
2.2 Base Rate
2.3 Applicability of Base Rate
2.4 Floating Rate of Interest on Loans
2.5 Levying of penal rates of interest
2.6 Enabling clause in loan agreement
2.7 Withdrawals against uncleared effects
2.8 Loans under consortium arrangement
2.9 Charging of interest at monthly rests
2.10 Zero percent Interest Finance Schemes for Consumer Durables
2.11 Excessive interest charged by banks
Annex 1 Illustrative Methodology for the Computation of the Base Rate
Annex 2 Guidelines on Benchmark Prime Lending Rate (BPLR) applicable to loans sanctioned  up to June 30, 2010
Annex 3 Interest Rate Structure for all Rupee Advances
including Term Loans of Commercial Banks sanctioned  up to June 30, 2010
Appendix List of circulars consolidated

A. Purpose

To consolidate the directives on interest rates on advances issued by Reserve Bank of India from time to time.

B. Classification

A statutory directive issued by the Reserve Bank in exercise of the powers conferred by the Banking Regulation Act, 1949.

C. Previous instructions

This Master Circular consolidates and updates the instructions on the above subject contained in the circulars listed in Appendix.

D. Application

To all scheduled commercial banks, excluding Regional Rural Banks.


Click here to download the Master Circular


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