CIRCULAR No.

: 105/2018
INDEX : ADV-31
FCR-ADVANCES GROUP DATE : 26-02-2018
DEPARTMENT OF INFORMATION TECHNOLOGY WING, AJIR
HEAD OFFICE : BENGALURU - 560001

SUB: FINE TUNING IN MCLR FUNCTIONALITY IN CBS

Marginal Cost of Funds Based Lending Rate (MCLR) has been introduced in our Bank and
the detailed guidelines on MCLR have been communicated by R M Wing, vide HO Circular
No.: 185/2016 Dated: 01.04.2016. Technical guidelines for MCLR functionality in CBS FCR
were issued by DIT vide HO Circular No.: 555/2017 Dated: 29.11.2017.

We have implemented further fine-tuning in MCLR functionality in CBS FCR and the details
are mentioned hereunder:

1. ROI reset will happen only if limit amount is getting enhanced or Limit end date is
getting extended in CHM07 and accordingly MCLR Reset dates in CHM99 will get
updated.

2. In case of other modifications in CHM07, such as Changing Variance/Ticking Secured

Flag/Sanction Ref No/dummy Modification etc., ROI reset will not happen and MCLR
Reset Dates will not get updated.

3. While modifying Limit, though system displays to maker current MCLR and accordingly
Net Interest rate is arrived, the system will display Correct Net Interest Rate during
Authorization by the checker.
To ensure that maker does not try and effect any modifications in ROI based on the
display, a message reading as follows will appear at the time of modification, “At the
time of modification current MCLR Rate will appear. Correct ROI will be displayed at
the time of authorization”. Hence, maker should not alter the ROI displayed by the
system.

4. New Validation has been incorporated in LNM83 to ensure that linking of MCLR index
is allowed only when MCLR flag is ticked in ALM35/LNM35.

For Base Rate/BPLR accounts if user tries to change the Index code to MCLR Index
following error message will appear:
“For Swapping from Base rate/BPLR to MCLR Please go to LN525/AL525”

In all the above cases, user has to verify the revised ROI applicable to the
accounts and ensure correctness and the Net ROI is as per sanction at the time of
authorization. In case of any short collection of interest by the CBS system,
differential interest is to be collected manually by the Branches.

Branches/Offices are advised to be guided by the above.

D N V SRINIVASA RAO
DEPUTY GENERAL MANAGER
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