Base Rate: What is Base Rate?

Base Rate. What is Base Rate?

Base Rate is the minimum rate below which Bank’s are not permitted to lend barring certain exceptions.  It is the minimum rate of interest that a bank is allowed to charge from its customers. Reserve Bank of India (RBI) rule stipulates that no bank can offer loans at a rate lower than the Base Rate to any of its customers.

Base Rate replaced Bank Prime Lending Rate (BPLR) on July 1, 2010.

Present Base Rate: 9.80% – 10.25%

31 thoughts on “Base Rate: What is Base Rate?

  1. at present it is 9.70%-10.25%

  2. What is Smart card in Banking Terms

  3. What is BASEL I and BASEL II

  4. who ascertain or fixes bank rate ?
    RBI or BANK Themselves

  5. what is equities,bond,debentures?

    • 1.Equities can be think as ownership in any asset after all its outstanding dues and debts are paid off.For example car,home,property etc. without any outstanding debt, can be considered as owners equities.

      2.Bonds are the debt of the company or the government issuing it for the period of more then one year.Basically when a company issues bonds it borrows money from the bond holders and use them in their basic company operations.The customers or the bond holders get the amount and intrest stated in the bond at the end of the bond tenure.

      3.Debenture are generally a debt instrument that is not secured by physical assets.Debentures are backed only by the general reputation of the issuer.It is generally issued by the govt. and corporate sectors.Bond buyers generally purchase debentures on the belief that the bond issuer will not default them at time of repayment.

  6. can v use this site for banking awarness plz suggest


    • Kanchan Nagesh says:

      Bank rate means the rate at which RBI lends money to other banks or financial institutions.

      And Base rate means the rate of interest that a bank is allowed to charge from its customers.

      • Bank rate is the interest rate which RBI charges from its clients* for their LONG-term loans.

        Repo Rate = RBI charge that much interest from its clients on SHORT term loans.

      • Very precise answer Kanchan. In addition to that Bank Rate is long term in nature where RBI lend money for long term purposes to Indian Commercial Banks whereas Repo Rate is short term in nature where RBI lend short term funds to commercial bank to meet the liquidity crunch in the market.

  8. what is the impact of inflation on rupee devaluation

  9. good website. thanks.

  10. Vërtïkä Ġüptä says:

    what is CLR, SLR, Bank rate, Repo Rate, Reverse Repo Rate??

    • 1.CRR is the minimum percentage of deposit of banks that should be kept with RBI in cash,which can be utilize them at time of their need.
      2.SLR …Apart from the minimum percentage of deposit that should be kept with RBI as CRR,bank also has to keep certain amount of money,cash,gold,bonds of their daily deposit with them to meet the daily customers need(withdrawl etc.).
      3.Bank Rate is the rate at which RBI or central bank of our country lend money to other commercial banks and financial institutions OR we can say the rate at which commercial banks borrow money from RBI without any sale of securities (Financial Assets).It is normally for the long term.Any hiked in the bank rate will also led to rise in the intrest rate charged by the bank in their lending to customers.
      4.Repo Rate is the rate at which the commercial banks borrow short term money from the RBI to overcome their basic needs by sale of securities and bonds, with a aggrement to repurchase it in the near future.
      5.Reverse Repo Rate is the rate at which RBI borrow money from the commercial banks for short term duration.When RBI feels that that there is excess money foating in the market it increases RR Rate so that more and more money should be deposited to RBI at good rate of intrest to banks.

  11. SWARN PRAKASH says:

    who fixes the saving account interest rate.

  12. sudhir kushwaha says:

    Base rate is 9.80 to 10.25 on RBI site.please update any thing latest

  13. The present (8-11-13) base rate is 8.75%

  14. hey guys please any body tell me what is the percentage of CLR,SLR,CRR,BASE RATE.

  15. In the last clerk exam it was asked…that …Loan cannot be provided below which Rate?- it should be base rate right ? and not bank rate..

  16. hey guys!!

    anyone, could you please explain about spread rate and RORC (Rate on Regulatory Capital?

  17. how decide the base rate ?

  18. which loans are exempted from base rate?

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