Mumbai, Mar 5: The Reserve Bank of India (RBI) has deferred the implementation of the base rate system by three months.
The banks were earlier expected to implement the base rate system from Apr 1. With RBI's Friday, Mar 5 decision the date has been deferred to Jul 1.
Announcing the central bank's decision, RBI Deputy Governor Usha Thorat said, “Concerns on base rate have been sorted out."
The proposed replacement of the current Benchmark Prime Lending Rate (BPLR) with base rate system came as many banks abused the current BPLR and provided loans to corporates below this rate.
The new base rate system sets a limit for the banks, below which no banks would be allowed to give commercial loans.