INDIAN Bank Base Rate:An Overview
The paper deals about the issues arising out of implementing base rate for Indian banks. With effect from July 1st, 2010, all banks are supposed to lend at base rate or minimum level of interest rate to customers. The net impact of this for retail customer will not be much as cost of funds for banks are not going to change much and cost of funds determine base rate. Big corporates will be biggest losers as they had advantage of getting loans at sub-base rates. Biggest gainers will be small and medium firms who were getting raw deal earlier from banks. Banks may lose market share in short term but there is going to be greater transparency and trickling down of policies made by RBI across banks due to base-rate system. Game theory has been applied to explain the base rate transition scenario in the paper.
|Date of creation:||21 Sep 2010|
|Date of revision:||28 Oct 2010|
|Publication status:||Published in Niveshak , IIM Shillong Finance Magazine 9.3(2010): pp. 12-14|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- International Monetary Fund, 2004. "Interest Rate Volatility and Risk in Indian Banking," IMF Working Papers 04/17, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25667. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.