A Reserve Bank of India (RBI) working group set up to rework the benchmark prime lending rate (PLR) structure is mulling multiple benchmark system for different borrowers and exemption for home loans from PLR.
A meeting of the BPLR committee, headed by RBI Executive Director Deepak Mohanty and comprising external experts and IBA met here today to discuss proposals in the draft report.
The committee is considering multiple PLRs for corporates, SMEs and retail borrowers and is likely to meet by mid-September to finalise the recommendations on the PLR structure. PLR is the interest rate that commercial banks charge their most credit-worthy customers.
Besides, the panel is also discussing options to differentiate loans below Rs 2 lakh to protect the interests of small borrowers.
"The draft report is considering multiple PLR system. They are also discussing the possibility of excluding home loans from the PLR," Indian Banks Association Chief Executive K Ramakrishnan, who attended today's meeting, told PTI.
An IBA sub-group is likely to meet sometime this week to discuss about the suggestions in the draft report and will give its feedback to the RBI panel by mid-September, Ramakrishann said.
The Reserve Bank constituted a special committee to revisit the existing PLR structure to bring more transparency in the manner in which banks arrive into the PLR.
