The Reserve Bank of India (RBI) is scheduled to meet chairmen and managing directors of commercial banks on September 16 on the contentious issue of benchmark prime lending rate (PLR). RBI deputy governor Rakesh Mohan will meet the senior bankers to formalise the concept.
Senior bankers said the RBI has already had a couple of meetings on this issue over the last two months and this is the last meeting to give final touches to the benchmark PLR concept. The RBI is expected to announce this in its forthcoming credit policy next month.
The RBI is in favour of abolishing the tenor-linked PLR and introducing only one benchmark PLR. The trigger for this move is different rates charged by banks on home loans.
However, bankers are not happy with the idea of one PLR as they feel that the cost of funds is different depending on the maturity profile.
The apex bank had asked the banks last month to workout the formula for benchmark PLR taking into account various factors such as average cost of funds, operating expenses and non-performing assets, etc.
The move follows RBI governor Bimal Jalan
