New Delhi, Dec 09: Reserve Bank Deputy Governor, K J Udeshi, today said average lending rates in the country will come down after banks adopt the new benchmark prime lending rate from January one, 2004. Senior bankers like PNB chief S S Kohli and Corporation Bank chairman K Cherian Varghese, agreed with RBI's view and said lending rates may come down by 0.25 per cent in the coming months also on account of the excess liquidity in the banking system.
"Benchmarking is definitely necessary because we don't want banks to give sub-PLR rates to borrowers in some sectors and neglect other sectors," Udeshi said on the sidelines of a conference on banking organised by International Chamber of Commerce here.
"As much as 50-60 per cent of sectors are not getting finance at sub-PLR. That is definitely not what RBI wants," she said.
When asked whether the average lending rates of banks will come down after introduction of benchmark PLR, Udeshi said "yes, it will come down."
The new benchmark PLR would be pegged by each bank on the basis of various parameters like cost of funds, operational cost, NPA and profit margin.
"Benchmark PLR will be introduced from January one, and it will ensure that most of the lending of banks will be at that rate," she added.
The RBI Deputy Governor said benchmark PLR would ensure that there is transparency and borrowers would be able to know the basis on which the interest rate is charged to them.
Bureau Report