The Reserve Bank today deferred the introduction of base rate system,which will be the new benchmark lending rate for banks,by three months to July 1. Banks will now implement base rate system from July 1,2010,RBI Deputy Governor Usha Thorat said here. Concerns on base rate have been sorted out, she said. Earlier,banks were expected to implement the base rate system from April 1. RBI has come out with a proposal on replacing the current benchmark prime lending rate (BPLR) with base rate system,below which no banks would be allowed to give commercial loans. The current BPLR has been much abused,since banks provide many loans to high rated corporates below this rate. As such there is no transparency in the lending rates,prompting RBI to ask banks to implement the new base rate system.
