January 5, 2026 Summary: In a major move to ensure transparent interest rates, the Reserve Bank of India (RBI) has mandated all scheduled commercial banks to link MSME loans to an external benchmark. Furthermore, the interest rate reset period has been shortened to 3 months. This ensures that when the RBI cuts repo rates, the benefit reaches small business owners much faster than before.
RBI Directive: All MSME Loans Must Now Link to External Benchmarks
