With only a few days left for base rate coming into effect, banks are on their toes working on the implementation of the new regime. Not a single bank has disclosed their base rate. The largest lender of the country, State Bank of India was expected to take the lead in announcing the base rate which is coming into effect from 1st July 2010.
SBI had infact indicated that its base rate would be announced by June 15. A senior SBI official has indicated that the bank has held back its announcement because it still needs to clarify some issues like farm loans and export credit interest rate after the implementation of base rate.
However, other banks say that at an informal meeting, SBI had announced that its base rate would be around 7.5%. "By doing that, SBI was running the risk of being out of sync with the rest of the market," said a senior executive of a large public sector bank.
Also, there is almost no hint as to what would be the base rate of the largest private sector lender, ICICI Bank. It is expected that the base rate for private sector banks would be lower than the public sector counterparts.