Clarification on HO RMD Circular no. 432 dated 01.10.

2019g: Interest Rates linked to

External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

1. The concession of 0.25% for Priority Please be guided by the master circular
sector coverage is still applicable or of respective loan products.
the same has been discontinued.
2. The concession of 1% in PSB The concession is applicable in terms of
Vyapar/PSB Mortgage/PSB Liquid PSB Vyapar Loan Circular No 57 dated
SME is valid or the same has been 16.02.2018 / PSB Mortgage Loan Circular
discontinued. No 56 dated 16.02.2018/ PSB SME
Liquid Plus Circular no. 58 dated
16.02.2018.
3. In cases where CIBIL score is less Loan cannot be sanctioned if the CIBIL
than 650 for new customers, whether score is less than 651 for new
the loan is to be sanctioned by the customers.
higher authority or the higher authority
has to give in principle approval.
4. In cases where the CIBIL score is less New loans cannot be sanctioned to any
than 600 for existing customers, customer having CIBIL score less than
whether it is to considered for 600.
sanctioning or not.
5. Documentation executed on The guidelines in this regard are being
01.10.2019 and 03.10.2019 need to issued separately.
be changed, is it valid or not.
6. Whether only Transunion (TU) CIBIL Yes, only CIBIL Transunion (TU) score
Score be considered & Personal (PL) will be considered in this regard.
CIBIL Score not to be considered

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Clarification on HO RMD Circular no. 432 dated 01.10.2019g: Interest Rates linked to
External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

7. In case of loans above Rs 25.00 lacs Only CIBIL Transunion (TU) score will be
where two CICs reports are to be considered in this regard.
taken, in such cases which CICs score
be considered or both to be
considered.
8. Whether in principle approval from 1. In-principle approval from Zones
Zones is now required or not where is required as per extant guidelines
CIBIL score is below 700. where CIBIL score is between 651
to 699.
2. Borrowers having CIBIL score
between 650 to 600 will be
sanctioned by next higher
authority/Cen-MARG only to
existing borrowers (More than one
year old regular/standard loan
account). No new walk-in
customer allowed in this range.
3. No new loan is to be sanctioned to
any customer having CIBIL score
below 600.
4. No loan to be sanctioned to CIBIL
Score 1 & 2.
9. In case CIBIL Score (TL/PL) & other No, it cannot be considered.
CICs is below 600, whether such
accounts can now be considered if
score is low due to wrong reporting or
technical errors in CIBIL other CIC.

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Clarification on HO RMD Circular no. 432 dated 01.10.2019g: Interest Rates linked to
External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

10. If credit facilities is sanctioned on Yes the EBLR is mandatory to all new
MCLR before this circular during floating rate personal or Retail loans and
October 2019, whether in such cases all floating rate loans to micro and small
Branches are required to change the enterprises, which are to be linked to
rate of interest to EBLR & system external benchmark w.e.f. 01.10.2019.
allowed such changes.
11. In case of Personal Loans: Where Guidelines will be issued in the matter.
salary is not disbursed through our
branches and borrower is Government
employee applicable rate of interest in
such cases is not mentioned.
12. 0.25% concession in case external Please be guided by Master circular of
rating from credit rating agency is PSB Vyapar loan & PSB- SME Liquid
between 1 to 4 as mentioned in PSB - Plus
Vyapar Loan & PSB- SME Liquid Plus
13. Fresh NFB facility to M/s Provestment
Services Ltd. along with reviewal of a
Mortgage loan sanctioned in 2018, for
which the party is yet to execute the
new documents for the availment of
the same, now following query(ies)
needs to be addressed,

1. Since the loan was sanctioned 1. Yes linking with EBLR is mandatory if
before 01.10.2019 and was linked with Loan is disbursed on or after 01.10.2019.
MCLR, so does the documents needs
to be done as per MCLR or as per new
EBLR rates.

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Clarification on HO RMD Circular no. 432 dated 01.10.2019g: Interest Rates linked to
External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

2. EBLR guidelines are applicable w.e.f.

2. For resetting the interest rate of the 01.10.2019 on new loans only. The
mortgage loan reviewed which base is guidelines regarding switchover from
to used MCLR or ne EBLR. existing benchmark to EBLR will be
issued in due course.
3. For existing accounts (i.e. before
3. As per the latest sanction & the 01.10.2019) please be guided by extant
original documents executed for the renewal /review guidelines.
mortgage loan(last year), now on the
reviewal of it the interest rate is
supposed to be reset after one year
but as per the new interest scheme the
Repo rate component linked to EBLR,
will automatically reset on quarterly
basis.
14. The circular is for linking Priority Only those new floating rate personal or
Sector loans to external benchmarks Retail loans and floating rate loans to
and with regard to NPS loans nothing micro and small enterprises as
is being mentioned. Please clarify specified in HO RMD circular no. 432
whether the same continue to be dated 01.10.2019 are to be linked to
linked to the existing MCLR system EBLR w.e.f. 01.10.2019.
15. Existing Loan documents are made The guidelines in this regard are being
as per MCLR . Please advise the issued separately.
required amendments in the loan
documents.
16. In case of loans sanctioned prior to Linking of EBLR shall be determined on
01.10.2019 on the basis of MCLR but the basis of date of disbursement.

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Clarification on HO RMD Circular no. 432 dated 01.10.2019g: Interest Rates linked to
External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

implementation of sanction /
disbursement post 01.10.2019, what
ROI to be charged in such loan
accounts i.e. whether to be linked to
MCLR or repo rate?
17. In case of existing loan accounts Guidelines regarding switchover from
where reset of MCLR is yet to be due existing benchmark to EBLR will be
and the customer wants to link his loan issued in due course.
account to repo rate, what procedure
to be followed?
18. Pricing of PSB Vyapar, PSB SME Pricing of PSB Vyapar, and PSB SME
Liquid Plus and PSB Mortgage is not Liquid Plus is not linked to internal rating.
linked to rating of the customers. But, PSB Mortgage (other than personal
Whereas in the circular, we have use .i.e. MSE) is linked to internal rating
linked the pricing of PSB Vyapar, PSB of the customers.
SME Liquid Plus and PSB Mortgage However in the above three types of loan
(MSE) to rating. accounts assessment of internal rating is
mandatory (at the time of original sanction
and subsequent review/renewal) since on
every annual review/renewal a
discount/premium of 0.10% will be
charged in ROI for upgrade/downgrade in
internal credit rating scales by one notch
each.

19. ------------------ For PSB Personal Loan though the

pricing has not been linked to CIBIL, but

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Clarification on HO RMD Circular no. 432 dated 01.10.2019g: Interest Rates linked to
External Benchmark (Repo Rate)-EBLR
S No. Queries Clarification

CIBIL must be drawn to check the

eligibility and also applying
discount/premium next year at the time of
reviewal.

*****

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