The Reserve Bank of India (RBI) has issued draft directions on interest rates for loans and advances and invited public comments on the proposed framework.

The draft aims to establish a harmonised, principles-based framework for determining interest rates on both fixed and floating-rate loans across all regulated entities, including banks, NBFCs, regional rural banks and cooperative banks.

The RBI said the proposed framework seeks to improve monetary policy transmission, ensure appropriate pricing of credit risk and promote fair and non-discriminatory treatment of borrowers. It also addresses divergent practices in areas such as MCLR determination and provides a broader regulatory framework for fixed-rate loans.

The draft directions have been issued for consultation, with final directions for each category of regulated entity to be issued after considering the feedback received. Stakeholders can submit their comments by September 11, 2026.