Build your professional network on facebook via our app Go to app
 
 
 

Will replacement of BPLR by base rate lower loan rates for consumers?

Created by : Rashmi Patil, Financial services  | 02 15 2010 11:53:47 +0000
Industry : BankingFunctional Area : India(Markets)
Keywords : replacement base rate bplr lowering loan rates
Activity:  336 views;  last activity : 07 06 2010 20:18:09 +0000

The special invitational or teaser rates for new home loans which were less than those offered to earlier customers are set to be withdrawn which means a hike of up to 2% in interest rates offered by both private and public banks in the next one month.

The move by banks to raise their interest rates is also in line with the RBI asking banks to follow a common Base Rate system that should replace their existing PLR system with effect from April 1, 2010. Banks may determine their actual lending rates on loans and advances with reference to the base rate.

So users, will replacement of BPLR by base rate lower loan rates for consumers?

  
 Refer 457
Share
 
 
  Rate : 
 
 
Yes Vs No
3
 
 
 
 
2
2
1
Support   Support
 
0
0

In the calculation of base rate we are taking only the non allocatable operating cost because taking all the operating cost will cause larger dispersion of base rate from bank to bank. Coming to lending rate, it requires credit risk and tenor risk to be added with the product specific operating cost. Hopefully it is lower.
By shome suvra chakraborty, costing &MIS, Patton International Ltd  | 02 15 2010 23:48:20 +0000
0
0

On the maximum, this replacement will bring the interest rate down to affordable level to consumers but the main goal behind the replacement is to pass on the benefit to consumers automatically, as it is based on the cost of fund. So, I think it's a good move by the RBI.
By Rashmi Patil, Financial services  | 02 15 2010 11:53:47 +0000
0
0

In my view, for reduced rated the business profile of the bankers must change, not the BPLR. So, This replacement doesn't seem to be lowering loan rates for customers.
By Jyoti Rath, Sr. Associate, Barclays  | 02 15 2010 11:59:13 +0000
Argue for "Yes"
Argue for "No"
 Found the debate "Will replacement of BPLR by base rate lower loan rates for consumers?"  interesting ?  Suggest to your connections and communities  
Leading Recruitment Firm
Viewers also viewed
Owning a home is a dream of every one, A home which actually symbolizes a safe haven of security...
 
117 referals 10 arguments, 707 views
THE  GENERAL APPREHENSION OF THE CONSUMER IS THAT THE ONLY ASSURED SAVING INCOME WILL BECOME A...
 
0 referals 4 arguments, 189 views
 
69 referals 5 votes, 218 views
more...  
Recent Knowledge (3)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 97 views
These days as I switch on the tv or radio or look at a hoarding I do feel that power of ads I...
 
3004 referals 23 arguments, 482 views
more...  
Sponsored Jobs
More From Author
Sometimes our moeny saving thought process is narrow and we do some stupid mistakes which actually makes us spend more than we save. Such mistakes should better be avoided. To avoid first we need to know what all mistakes can we make. So let us...
Integration of goods and services taxation would give India a world class tax system and improve tax collections. It would end the long standing distortions of differential treatments of manufacturing and service sector. The introduction of goods and...
Ego comes naturally ..as you rise you either need to protect yourself from it or it will show its colour. Ego clashes come out of four walls in no time.
more...  
  • Popular Knowledge
  •  
  •  
  • Popular Jobs
  •