Saturday, February 9, 2013

What is Base Rate and PLR in terms of loans in Indian finance market

The Base Rate is the lowest rate at which banks can lend to anyone.This concept was introduced on July 1 2010.

Earlier Banks were using BPLR(Benchmark Prime Lending Rate). BPLR has now lost its importance after introducing the Base Rate.
Only few Banks are using the BPLR.

The BPLR system, introduced in 2003, BPLR did not fulfilled their original objective of bringing transparency to lending rates. This was mainly because under the BPLR system, banks could lend below the BPLR.

There can be only one Base Rate for each bank. However, banks have the freedom to choose any benchmark to arrive at a single Base Rate but the same needs to be disclosed transparently.

For latest Base Rate for all banks please visit the website-

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