Banks to follow competitive pricing with base rate
By Neelima Shankar
May 21, 2010
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With the banking industry going to shift to the base rate system of lending from 1 July 2010 , all banks are busy calculating their respective base rates on which they would be baisng their loan pricing schedule there upon.

It is expected that the industry average for base rate would be between 8-9%. But some banking majors like SBI, HDFC Bank and others like Kotak Mahindra Bank are keen on developing a competitive scenario by aiming at a more aggresive rate below 8%.

Sources suggest that SBI is targetting a rate somewhere between 7-8.5%. While HDFC Bank has a target of 6.5%, Kotak Mahindra Bank is aiming at 6.5-7%.

Many banks are said to be targetting their base rate depending on the rate set by SBI.

Axis Bank is looking pricing its base rate between 8-9% whereas Punjab National Bank is looking at base rate above 8%. Dena Bank and Bank of India are expecting their rates to be above 8%.




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