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Why should you shift from BPLR to base rate?

A number of home loan borrowers in India are worried about the effect of base rates (new benchmark lending rates) introduced in the banking system last year on their existing home loans.

A brief on the home loan rates

Prior to July 1, 2010, home loans in India were  linked with a bank’s BPLR (benchmark prime lending rate). Home loans rates where driven by competition and where pegged below BPLR. In order to bring transperancy in the home loan market, the RBI introduced the base rate. Now, each bank has to mandatorily release its base rate and all loans have to be based on the base rate.

While there is difference in the way both base rate and PLR is calculated by banks, base rate effectively is the lowest rate that a bank would charge its customers.

Customers who have availed home loans prior to introduction of the base rate, often wonder if they should shift their home loan from being linked to BPLR to being based on the base rate.

Here’s a nicely penned article by ET Bureau which gives reasons why one should switch to base rate. Read

Categories: Banking

RBI issues draft guidelines on banks’ equity investments

Categories: Banking

India’s Key Economic Indicators

March 8, 2011 1 comment

A brilliant summation of economic indicators: http://eaindustry.nic.in/Key_Economic_Indicators/Key_Economic_Indicators.pdf

The indicators included are:

  • Agricultural – Foodgrain Production
  • Employment & Unemployment Indicators
  • Performance of Core industries
  • Performance of Index of Industrial Production
  • Wholesale price index and inflation
  • Food and non-food credit of scheduled commercial banks
  • Sectoral deployment of bank credit
  • World commodity prices

Highlights of Union Budget 2011-12

Basic Thrust Read more…

Quarterly Statistics on Scheduled Commercial Banks

February 17, 2011 Leave a comment

RBI’s Quarterly Statistics on Deposits & Credit of Scheduled Commercial Banks. Link

Data in xls format

Mobile Banking in India

December 6, 2010 Leave a comment

A well-comprehended article on money transfer via cellphones. Read

Banker to India’s growth

November 8, 2010 Leave a comment

Amol Agrawal has written a nice piece on How is India financing its growth?

A recommended read.