The State Bank of India (SBI) has fixed its based rate at 7.5% as directed by the Reserve Bank with the motive to end sub-prime loans to corporates. The new rate is scheduled to come into effect from July 1. SBI is the largest public sector banking organization in the country.
Apart from the SBI, other banks such as the Punjab National Bank and Bank of Baroda have also set base rates slightly higher at 8%.
Base rates set by the SBI will act as benchmark for all other PSU banks and July 1 is the deadline given by RBI to shift base rate regime to banks. The rates will be changed on a quarterly basis.
Base rates will be calculated on the basis of cash deposit, overhead costs and RoNW. The private sector banks are expected to have lower base rates due to lower cost to income ratio.
As for Private Banking sector, two of the country’s largest organizations have announced their base rates. HDFC Bank has targeted the base rate at a range of 6.75-8%, whereas ICICI Bank has fixed a rate of 7.5%
Related posts:
- RBI credit policy- repo and reverse repo rates increased by 25 bps
- ISRO finds a cave in moon : Could Be used as “Base Station”
- Rail Budget 2011 to be announced in few hours
- Another Bad News for Speakasians : 2 Bank Accounts of Company got Freezed in Singapore – Speak Asia Exposed
- L&T Finance IPO Subscription Status & Listing Date
