RBI panel to revisit benchmark prime lending rates regime

Accordingly, the Working Group headed by RBI Executive Director Deepak Mohanty, will review the concept of BPLR and manner of its computation and examine the extent of sub-BPLR lending and reasons thereof. 

It will also examine the wide divergence in BPLRs  of major banks and suggest an appropriate loan pricing system for banks based on international best practices.  The group will also review the administered lending rates for small loans up to Rs 2 lakh and for exporters and suggest suitable benchmarks for floating rate loans in the retail segment.  Besides, it will also consider any other issue relating to lending rates of banks.
It was indicated that the Working Group to be Mohanty will have representations from the concerned departments of RBI, Indian Banks’ Association, Banking Codes and Standards Board of India, and public, private and foreign banks.

External experts

The group would also comprise external experts. Accordingly, the constitution of the Working Group apart from its Chairman Mohanty will also have members such as T T Rammohan from Indian Institute of Management – Ahmedabad, Jahangir Aziz (Chief Economist India for J P Morgan), P Vijaya Bhaskar (CGM - Department of Banking Operations of RBI), Janak Raj (Adviser-in-Charge at Monetary Policy Department of RBI). 

Himanshu Joshi (Director - Monetary Policy Department of RBI)  will be member secretary.

That apart, representatives from Indian Banks’ Association, Banking Codes and Standards Board of India, State Bank of India, Punjab National Bank, Canara Bank, ICICI Bank and Citibank will be members.

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