Most bankers have indicated that they will keep their base rate between 8 and 8.5 per cent, up to 5 percentage points lower than the existing prime lending rate.
The bankers said this even as they awaited a clarification from the RBI on concessional loans, such as farm credit.
The base rate, to come into effect from July 1, will replace the existing Benchmark Prime Lending Rate (BPLR) — which varies between 11 per cent and 13.5 per cent for public sector banks.
“It (base rate) could be in between 8-8.5 per cent,” Canara Bank chairman and MD, Mr A. C. Mahajan, said. The bank will announce the rate by the last week of June, he adds.
Base rate, the lowest rate that the bank can charge from a customer, is intended to bring about more transparency in lending operations of banks.
SBI, the country’s largest lender, said it is fully prepared for the new interest rate regime, and said it would announce the base rate by June 15. — PTI