Benchmark lending rates to be reviewed

RBI has asked the Indian Bank Association (IBA) to review the benchmark prime lending rate (BPLR) system and issue transparent guidelines for appropriate pricing of credit. IBA said it would form a committee which would consist six to eight major players and the issue is expected to be sorted out in the next three weeks.

RBI Governor Y.V. Reddy has proposed the review, as suggested to him by the bankers. ‘‘The banks are themselves not comfortable with the BPLR system the way as it is now. Hence, we have asked IBA to make a review of the system and suggest ways to make it transparent,’’ he said.