BPLR may finally not evanish in totality
By Joseph Samson
Jul 29, 2010
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Bankers attending the monetary policy review on Tuesday have returned with a feeling that the concept of BPLR might not see a permanent end by RBI.

Banks have been asking RBI to come out with an order saying that the BPLR system would stop existence from a set period. This they feel is important at a time when they are transiting from BPLR to base rate system of lending as it would be helpful in convincing and explaining to the customer the need to switch tracks the base rate way.

Long term fixed rate loans are a cause of worry for banks as they feel that if customers do not switch from BPLR to base rate in case of such loans then there would be a huge pressure on them from the operational side.

RBI, Deputy Governor, Usha Thorat says, "There was a feeling that if the regulator came with some kind of an equivalent measure or say that this could subsume into the base rate. Then this is something that could be considered. Our response was that legally whenever you alter a contract, it should not be to the detriment of the customer. So within that parameter if there is something that we can legally can explore. This is something that we will do and we are examining it."


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