The second largest public sector lender of the country, Punjab National Bank has announced its base rate at 8%.
PNB”s rate is 0.5% higher than the rate fixed by the largest lender of the country, SBI.
SBI has fixed its base rate at 7.5%.
The base rate set by PNB is 3% lesser than its BPLR. PNB’s BPLR is 11%.
Borrowers would now be charged interest rates over and above the base rate depending on their credit profile. But no lending would be done below the base rate. In fact the basic idea behind implementation of base rate has been to bring about transparency in the lending mechanism of the country.
The system will however not be applicable to concessional loans for agriculture, exports and other specified sectors.
This was clarified by a letter sent by RBI last week to the Indian Banks’ Association by RBI last week.