Bank Lending Rates in India, Base Rate, Bank Rate, Loans, Advances, PLR: Banknet India

Domestic Bank Lending Rates

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Banks in India have switched to Base Rate system from Benchmark Prime Lending Rate (BPLR) system from July 01, 2010. Base Rate shall include all those elements of the lending rates that are common across all categories of borrowers. Banks may choose any benchmark to arrive at the Base Rate for a specific tenor that may be disclosed transparently.

Banks may determine their actual lending rates on loans and advances with reference to the Base Rate and by including such other customer specific charges as considered appropriate. ... Read Full Guidelines

Introduction of the base rate system in India’s banking system will enhance competition in the short-term lending space. Issuance volumes in the debt capital markets are also likely to increase as the highly rated corporates begin to shift towards these markets. However, competitive pressures are unlikely to impact the overall profitability of the banking system materially, says Crisil. The base rate system is also expected to enable banks to respond more efficiently to monetary policy measures.... Read More

LATEST LENDING RATES (BASE RATES)- August 2011

In terms of RBI guidelines, Banks in India have switched to Base Rate system from Benchmark Prime Lending Rate (BPLR) system from July 01, 2010. Base Rate Range of Scheduled Commercial Banks for the month of March 2011 was- Public Sector Banks 8.25 to 9.50% ; Pvt. Sec. Banks 8.20 to 10.00%; Foreign Banks 6.25 to 11.75 %;

Following the Reserve Bank's decision to raise short-term key rates in its first quarter review of monetary policy in 26 July 2011, lenders have responded by increasing interest rates. RBI had raised the short-term lending (repo) rate by 50 basis points to 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent. Major lenders including State Bank of India, Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce, ICICI Bank have raised interest rates to 10% Following is the updated list. Please note that there may be change in rates from the date of our updation-

Banks                 Base Rate (p.a%)

PUBLIC SECTOR BANKS

State Bank of India                 10.00%
Andhra Bank                 10.75%
Allahabad Bank                 10.75%
Bank of Maharastra                 10.50%
Canara Bank                 10.75%
State Bank of Mysore               10.00%
Bank of India                10.75%
Bank of Baroda                10.75%
Central Bank of India                 10.75%

PRIVATE SECTOR BANKS

ICICI Bank                 10.00%

FOREIGN BANKS

Abu Dhabi Bank                 9.50%
Barclays Bank                 10.00%
Bank of Bahrain & Kuwait                 9.75%
Bank of America                9.50%
BNP Paribas                 9.25%
CitiBank                 9.75%
Credit Agricole                 9.50%
Development Bank of Singapore           8.75%
Deutsche Bank                 9.50%
HSBC                 9.75%
J P Morgan                 9.25%
Royal Bank of Scotland                 9.75%
State Bank of Mauritius                 10.00%
Societe Generale                 9.75%
Standard Chartered Bank           9.50%

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Several public sector lenders,led by the India’s biggest lender State Bank of India, started lowering their prime lending rates, the benchmark interest rate, to which all loans are linked from November 2008. This was following the lReserve Bank of India's slashing reserve ratios and cutting short-term rates and the government’s assurance of favourable policy measures.

To boost economic activity, since October, RBI has lowered the repo rate, or the rate at which it lends, by 425 basis points. To discourage banks from parking surplus cash, the central bank has also lowered the reverse repo rate by 175 basis points. The cash reserve ratio has also been reduced by 400 basis points to increase liquidity in the system... Read More

Number of public sector banks are going for third round of interest cuts from 1st May 2009. State Bank of India has already frozen new car loans interest rates at 10% for one year, home loan rates at 8%, Credit to farmers at 8 per cent for a year to stimulate the demand... Read More

A borrower first take into consideration the price and than only look at the interest rates. The demand for loans will pickup only after builders & manufactures pass benefits of various financial stimulus measures announced by Indian Government and Reserve Bank of India by reducing the rates.

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