Home > Experts > Others > BASE RATE & PRIME RATE


Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


BASE RATE & PRIME RATE (Others)

Report Abuse
This query is : Resolved

Author : Anonymous

( Author )
06 March 2011

plz explain the difference between the base rate & prime lending rate


CMA. CS. Sanjay Gupta

( Expert )
06 March 2011

From 1st July 2010, banks have moved to a system of “base rate” from the existing system of “benchmark prime lending rate (PLR)” that was introduced in 2003.

What is the base rate (BR)?
It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.


How is it different from bank prime lending rate?
BR is a more objective reference number than the bank prime lending rate (BPLR) — the current benchmark. BPLR is the rate at which a bank is willing to lend to its most trustworthy, low-risk customer. However, often banks lend at rates below BPLR. For example, most home loan rates are at sub-BPLR levels. Some large corporates also get loans at rates substantially lower than BPLR. For all banks, BR will be much lower than their BPLR.

Also see below links for more details.


http://www.finblog.in/index.php?option=com_content&view=article&id=79:from-bplr-to-base-rate&catid=36:sector-outlook&Itemid=58

http://www.allbankingsolutions.com/BPLR-vs-Base-Rate-Benchmark-Prime-Lending-Rate.HTM


Previous

Next

You need to be the querist or approved CAclub expert to take part in this query .


Click here to login ( Members Login ) now


Similar Resolved Queries :










submit










Quick Links





back to the top