The Reserve Bank of India (RBI) has said that it would review guidelines on the marginal cost of funds based lending rate (MCLR), potentially preparing to do away with the system for lending rate calculation less than three years after it was introduced. In its 2017-18 annual report, RBI said it would review the MCLR guidelines as well subsidiarisation of foreign banks “for the purpose of fostering competition and re-orienting the banking structure in India.” It did not give more details. Bankers said a review was imminent because the MCLR system had not reflected the changes in rates. “World over, the bank rates have moved to an external benchmark which leads to uniform pricing. Currently banks in India calculate based on their internal benchmark which can be disputed and leads to a difference in rates between banks. This is likely to be changed,” said PK Gupta, managing director at SBI. The new MCLR regime was implemented in the fiscal year starting April 2016 and is closely l