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Home  » Business » RBI panel mulls multiple BPLR system; exemption of home loans

RBI panel mulls multiple BPLR system; exemption of home loans

Source: PTI
September 03, 2009 17:56 IST
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A Reserve Bank working group set up to rework the benchmark prime lending rate structure is mulling multiple benchmark system for different borrowers and exemption for home loans from BPLR.

A meeting of the BPLR committee, headed by RBI executive director Deepak Mohanty and comprising external experts and IBA met on Thursday to discuss proposals in the draft report.

The committee is considering multiple BPLRs for corporates, SMEs and retail borrowers and is likely to meet by mid-September to finalise the recommendations on the BPLR structure. BPLR is the interest rate that commercial banks charge their most credit-worthy customers.

Besides, the panel is also discussing options to differentiate loans below Rs 2 lakh (Rs 0.2 million) to protect the interests of small borrowers.

"The draft report is considering multiple BPLR system. They are also discussing the possibility of excluding home loans from the BPLR," Indian Banks Association chief executive K Ramakrishnan, who attended Thursday's meeting, told PTI.

An IBA sub-group is likely to meet sometime this week to discuss about the suggestions in the draft report and will give its feedback to the RBI panel by mid-September, Ramakrishann said.

The Reserve Bank constituted a special committee to revisit the existing BPLR structure to bring more transparency in the manner in which banks arrive into the BPLR.

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