RBI constitutes working group to review BPLR

Bs_logoImage
Press Trust of India Mumbai
Last Updated : Jan 20 2013 | 9:33 PM IST

With banks extending loans to corporates at sub-prime lending rates, the Reserve Bank of India (RBI) today constituted a working group to assess whether the current system of benchmark prime lending rate (BPLR) is relevant or not.

"In order to review the present BPLR system and suggest changes to make credit pricing more transparent, the policy proposed constitution of a working group on benchmark prime lending rate," the Reserve Bank said in a release.

RBI said the working group would examine the extent of sub-BPLR lending and huge difference in BPLRs of major banks.

BPLR is a rate at which banks lend to their credit-worthy borrowers while sub-PLR is the rate at which banks provide loans to attract bigger clients and blue chip companies.

The panel would also suggest suitable benchmark for floating rate loans in the retail segment and consider any other issue relating to lending rates.

Besides, the group would also review the administered lending rates for small loans up to Rs 2 lakh and would suggest an appropriate loan pricing system based on international best practices.

The working group which will be chaired by RBI executive director Deepak Mohanty, will have representations from the RBI, Indian banks’ association, Banking Codes and Standards Board of India, and public, private and foreign banks.

Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories

  • Over 30 subscriber-only stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Jun 11 2009 | 8:04 PM IST