'The Asset Liability Management Committee (ALCO) of the bank has decided to reduce base rate and BPLR
(benchmark prime lending rate) by 45 basis points,' the bank said.
SBI has hiked its base rate and BPLR
by 0.25 per cent to 8.25 per cent and 13 per cent, respectively.
Aa Banks often lend to larger clients at rate below BPLR
. A base rate will bring transparency in the system, he explained.
What's proposed: Base rate to replace BPLR
from April 1, 2010.
The ICICI has also cut rates on loans under the older BPLR
(benchmark prime lending rate) regime by 0.25 percent to 18.50 and for consumer loans, apart from cutting its floating reference rate (FRR) by a similar amount to 15.50 per cent which will benefit home loan borrowers.
STATE- RUN Bank of Baroda ( BoB) and Canara Bank on Thursday announced an increase in their benchmark prime lending rate ( BPLR
) by 0.5 per cent with effect from Friday.
Summary: Replacement of the benchmark prime lending rate (BPLR
) for banks with base rate, on 1 July 2010.
"The reduction in key rates by the Reserve Bank is not adequately reflected in the reduction of Benchmark Prime Lending Rates (BPLR
) of banks," he added.
Currently, banks follow system of internal benchmarks, including Prime Lending Rate (PLR), Benchmark Prime Lending Rate (BPLR
), Base rate and Marginal Cost of Funds based Lending Rate (MCLR).
Further, the ALCO has decided to reduce base rate and benchmark prime lending rate (BPLR
) of the bank by 10 basis points to 9.60 percent and 13.85 percent respectively, it added.