Pricing of housing loan by a commercial bank may follow the following steps in a logical sequence:

A. Competitive price determination

B. Specification of spread

C. Application of MCLR

D. Conduct of Credit Assessment

E. Quoting to prospective borrower

Choose the correct answer from the options given below:

Correct option is D

The logical sequence for pricing of housing loans by a commercial bank would typically involve the following steps: 1. Conduct of Credit Assessment: The bank evaluates the creditworthiness of the prospective borrower, considering factors such as income, employment history, credit score, and repayment capacity. 2.  Application of MCLR: The bank applies the MCLR, which serves as the reference rate for pricing the housing loan. The MCLR is a benchmark rate that reflects the bank's cost of funds and is periodically reviewed and revised. 3.  Specification of spread: The bank determines the spread or margin it wants to add to the reference rate, such as the Marginal Cost of Funds Based Lending Rate (MCLR), to arrive at the final interest rate for the housing loan. 4.  Competitive price determination: The bank assesses the prevailing market conditions and competition to determine a competitive pricing strategy for housing loans. 5.  Quoting to prospective borrower: Based on the competitive price determination, specification of spread, the credit assessment, and application of the MCLR, the bank quotes the final interest rate to the prospective borrower.