With the implementation of base rate from July 1, 2010 banks are expecting to raise lending rates. But it seems unlikely that base rate would also bring a growth buzz in the net interest margins (NIMs) of banks.

Bankers say that even if lending rates are hiked in some areas, they need to be kept low in other areas. Thus the overall yield would turn out to be more or less same.

According to SS Rajnan, chief financial officer, State Bank of India, there would not be any effect on the bank's NIM as the yield from lending would remain unchanged.

"I do expect commercial paper market to get a boost due to the base rate as short term borrowers will shift to that market. I don't think any kind of hurdles from legal or technology fronts will affect us while migrating to the new lending rate regime,'' he said.

K R Kamath, CMD, Punjab National Bank also has the same view. "Rather, I think that our job would then be to protect our NIM,'' he infact said.

"We will try to protect our NIM. The sub-PLR borrowers will be migrating to the CP market to a certain extent. Again, CP is a money market investment instrument and banks have a major role to platy in that space too,'' said MD Mallya, CMD of the bank.

However S Sridhar, CMD, Central Bank of India, has a different view. He expects an rise in the bank's lending rate with the implementaiton of base rate and feels this would positively impact the banks' NIM.

"We are in talks with other banks to sort out some of the grey areas related to the base rate . Those grey areas are related to short-term loans and loans provided to sectors like agriculture," he said.