Direct Answer
The MCLR is the minimum interest rate below which a bank cannot lend, determined internally based on its real-time cost of acquiring funds
MCLR Calculation Formula Components:
1) Timeframe: Trailing 3-month moving average.
2) Source Pool: Domestic deposits and borrowings.
3) Target Data: Weighted average interest cost explicitly on the volume of fresh/new deposits and borrowings, rather than the entire historical liability book.
1) Timeframe: Trailing 3-month moving average.
2) Source Pool: Domestic deposits and borrowings.
3) Target Data: Weighted average interest cost explicitly on the volume of fresh/new deposits and borrowings, rather than the entire historical liability book.