It has been indicated by most banks that their base rate would lie somewhere between 8-8.5%. This rate is upto 5% lesser than the existing prime lending rate of banks.
Banks have hinted this range of base rate irrespective of the dilemma that still persists regarding farm loans and export credit.
Base rate is coming into play from 1st July 2010. It would be replacing the Benchmark Prime Lending Rate (BPLR). Base rate is basically being implemented to bring about transparency in the lending mechanism of banking system.
"It (base rate) could be in between 8-8.5 per cent," Canara Bank Chairman and Managing Director A C Mahajan said.
"We have already indicated that the base rate would be between 7.5 per cent and 8.5 per cent," SBI chairman O P Bhatt said.
With base rate getting implemented, banks with a high CASA ratio would be in benefit as their cost of funds would be lower.