India Rate Hikes - What is Base Rate - Explained

India Rate Hikes - What is Base Rate - Explained

BPLR is dead...Long live the base rate

Effective July 1, all banks operating in India started adopting a new system of base lending rate, replacing the old system of BPLR (base prime lending rate) introduced in 2003. SBI was the first to fix its base rate at 7.5%, while other large nationalised banks all fixed their base rate at 8%. HDFC Bank fixed its base rate at 7.25%, while ICICI Bank and Axis Bank fixed the same at 7.5%. The base rate for public sector banks is in the range of 7.5% to 8.25%, while that for private sector and foreign banks is lower by 50-100 basis points.