The Reserve Bank of India (RBI) has laid down a fairly stiff timetable for the Indian Banks Association to come back with its plan for banks to determine and disclose their benchmark prime lending rates (PLR), that is the basic underlying prime lending rates on the basis of which all lending rates are calculated.
This is because the matter has been hanging fire since April when the regulator first expressed its desire for such a rate and with every passing day the announced PLRs are becoming more and more meaningless.
Quite simply, as banks keep lending at sub-PLR rates, the PLR has become a contradiction in terms