The minimum rate of interest below which any bank is not
allowed to lend any loan excepting certain exceptions. It is the minimum rate of interest that a
bank is permitted to charge from its customers. According to the rule of RBI no
bank can recommend loans at a rate lower than the Base Rate to any of its
customers.
Benchmark prime lending rate has been replaced by the base
rate and it effected from july 1,2010. Base Rate shall involve all those
elements of the lending rates which are common across all categories of
borrowers. Banks may select any benchmark to reach at the Base Rate for a particular
tenor that may be disclosed transparently.
All the banks has same base rate. Although, banks have the freedom to select
any benchmark to arrive at a single Base Rate but the similar requirements to
disclosed transparently.
Present Base Rate: 9.80% – 10.25%
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