The country's largest lender, State Bank of India has said that its base rate would be somewhere around 7.5-8.5%. This information was disclosed by Chairman of the bank, O P Bhatt. Bhatt said "We are working out the number and it could be between 7.5-8.5%."

In fact most banks are eyeing SBI's call before setting their base rates. The bank will be finally announcing its base rate on June 15th.

PNB, the second largest public sector lender in the country would have its base rate somewhere around 8.5-9%, K R Kamath, CMD of the bank said.

Base rate would be coming into effect from 1st July 2010. The main idea behind implementing the base rate has been to incorporate more transparency in the lending mechanism of banks.

"We will be announcing the rate by June 15. We are weighing several options on fixing the rate and will start talking to the customer about the new modalities," said S Sridhar, CMD, Central Bank of India.

"I find some upward bias on the interest rate. I believe that some portion of loan, which are given by us below BPLR, may get repriced,'' he explained. Allen CA Pareira, CMD, Bank of Maharashtra expected the base rate to be around 8%.

Cost of six months deposits would be a major parameter for banks while calculating base rate. Thus base rate for banks is expected to be different as banks pay different rates on six month deposits.