Banking regulator, Reserve Bank of India has started working on a clause according to which all customers of banks would be asked to shift to base rate system of lending by 30th June 2011.

"The central bank is currently examining the clause," said O P Bhatt, chairman and managing director, State Bank of India.

Base rate has been implemented to the banking system from 1st July 2010. As per the new system of lending, all new loans would be based on base rate. Also all existing loans coming up for renewal will be shifted to base rate system. But long term loans which do not come for renewal were a cause of doubt for bankers as to what rate would be applicable to them.

Bankers had requested the apex bank to extend the experimentation time for base rate to one year from the given six months time. "We have requested RBI to make it up to one year from the date of implementation," said M D Mallya, chairman and managing director, Bank of Baroda.

Credit growth in the country is also picking up and bankers are confident that the 20% target set by RBI is completely achievable. "Credit growth is picking up, part of it happened because of lending to telecom companies," bankers said.