A few days are left for base rate to come into play and the Government has sought from all PSU banks to give details of their effective interest rates for small borrowers under base rate system of lending.
The Union Ministry has also asked for a comparative analysis of the rates under the new system of lending as against the BPLR system of lending.
The ministry, in a letter to the Indian Banks’ Association has asked the banks to collect data about lending rates on home, automobile and education loan segments.
The ministry has sent the letter on grounds that no bank has yet announced their base rate. The country’s largest lender, State Bank of India had earlier said that its base rate would be announced by June 15th.
The basic idea behind incorporation of base rate has been to bring in transparency in the lending mechanism of the banking system.