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As subsequent to the introduction of an external benchmark system, the monetary policy transmission has improved in respect of the sectors where new floating rate loans have been linked to the external benchmarks. With a view to further strengthening monetary policy transmission, RBI has decided that all new floating rate loans to the Medium Enterprises extended by banks from April 01, 2020, shall be linked to the external benchmarks. The move is aimed at further strengthening monetary policy transmission so that the benefits of reduction in key lending rate (repo) can be passed on to medium enterprises also.

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11815&Mode=0

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