Government-owned IDBI Bank today announced its base rate at 8 per cent, below which it will not lend from tomorrow.
A host of banks, including the country's largest lender, State Bank of India, announced its base rates yesterday.
While SBI fixed its benchmark rate at a competitive 7.5 per cent, other lenders like Bank of Baroda, Union Bank of India, Central Bank of India, Bank of Rajasthan and Punjab National Bank pegged their rates at 8 per cent.
Leading private sector banks like ICICI Bank and HDFC Bank are also expected to declare their rates today.
The RBI decided to replace the existing benchmark prime lending rate (BPLR) system with base rate with an intention to bring in more transparency in bank lending.
The effective rate at which customers will avail loans will include components like tenure premium, risk premium and channel specific transaction charges above the base rate.
Announcing SBI's base rate, its Chairman O P Bhatt yesterday said that the applicable rates on loans will remain almost the same as now and the impact of the new system on consumer loans will be 'plus or minus 25 basis points.