Saturday, February 14, 2015

RBI changes rules on Base Rate

  • Banks can review their base rate calculation method every three years instead of the earlier- specified five.
  • Banks can review base rate every quarter
  • Banks must take the interest rate of that tenure of deposits which has the highest share in total deposit base.
  • Banks must have board approved policy on spreads charged to customers over the base rate.
  • Any differentiation in spreads must be in consistence with credit pricing policy of the bank.
  • Spread charged to existing borrower must not increase except when the credit risk profile weakens or loan tenure changes
  • The change in tenor premium should not be borrower specific or loan class specific. It will be uniform for all types of loans for a given residual tenor.


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