New RBI rules may end loan spread tinkering

The methodology used to calculate internal benchmarks will also have to be made publicly availableMUMBAI: Lenders may no longer be able to tinker with loan spreads over the benchmark rate to offer new borrowers better deals than existing customers. Draft RBI rules seeking to standardise interest-rate setting across banks, NBFCs and cooperatives require lenders to maintain the spread between the benchmark rate and the loan rate for at least three years.The proposed framework standardises interest calculation across lenders. Interest on advances will have to be charged on monthly rests, except for specified agricultural advances, and calculated on a daily reducing balance basis using the actual/actual day-count convention.Smaller lenders will get exemptions from some of the requirements.For