It is quite a scandal that the Prime Lending Rate (PLR) of banks is not what it is meant to be — the rate at which banks lend to their best clients. The PLR has become some kind of an arithmetical benchmark to mark up or down by a certain percentage to get the effective rate. Given the way things operate, the PLR could well have been 100 per cent or even the 16 per cent that most private banks have set it at. I am glad that the RBI has decided to put an end to this scandal. I agree that the change in the prime rate should be announced once a quarter, applicable from the first day of the new quarter (‘Getting interest rates right’, April 27). It will remove uncertainty and also make things easier.
PV Maiya, on email