Base rate really makes any difference ?
Does the base rate really make any difference to bankers or other stake holders?
Almost all banks have fixed rates between 7.5 to 8.00%. This is the minimum rate below which banks can not lend. As of now rates below this are enjoyed only by top rated corporates, who as rightly advised by SBI chairman Mr. bhat will move to other means of finance like commercial paper.
The flexibility provided by RBI in deciding rate allows banks to overcome any
problem in this area. They fix the Base rate and Load while charging interest.
Finally , ground reality is it does not serve any purpose.
Almost all banks have fixed rates between 7.5 to 8.00%. This is the minimum rate below which banks can not lend. As of now rates below this are enjoyed only by top rated corporates, who as rightly advised by SBI chairman Mr. bhat will move to other means of finance like commercial paper.
The flexibility provided by RBI in deciding rate allows banks to overcome any
problem in this area. They fix the Base rate and Load while charging interest.
Finally , ground reality is it does not serve any purpose.
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