Lending Rates of Scheduled Commercial Banks (Excluding RRBs)

Explanatory Notes

Press Release

Lending rates of commercial banks were deregulated since October 1994 subject to the condition that banks have to declare their Prime Lending Rates (PLRs) for credit limit over Rs.2 lakh as approved by their Boards. For credit limit up to Rs.2 lakh, PLR (now Benchmark Prime Lending Rate) remains as the ceiling rate. Since April 2001, commercial banks were given freedom to lend at sub-BPLR rates (for credit limit of over Rs.2 lakh) to creditworthy borrowers on the lines of a transparent and objective policy approved by their Boards.

Interest rates on export credit in rupee terms were rationalised by the Reserve Bank in the annual monetary and credit policy for 2001-02 by prescribing ceiling rates linked to the relevant PLRs of banks instead of earlier fixed/ceiling rates. At present, in respect of pre-shipment credit up to 180 days and post-shipment credit up to 90 days, the ceiling rate applicable is 2.5 percentage points below the relevant BPLR. In respect of pre-shipment credit beyond 180 days and up to 270 days and post-shipment credit beyond 90 days and up to 180 days, the ceiling rate was deregulated effective May 1, 2003.

The Reserve Bank, videparagraphs 59 and 66 of the Monetary and Credit Policy for 2002-03 announced on April 29, 2002, indicated its intention of collecting maximum and minimum interest rates on advances charged by banks and place the same in the public domain to enhance transparency. Accordingly, Reserve Bank is receiving actual lending rates from scheduled commercial banks (excluding RRBs) under Special Quarterly Return VI-AC. While submitting information on the maximum and minimum interest rates on rupee export credit as well as other credit, banks are advised to ignore extreme values in the lending rates (up to 5 per cent of advances on either side). Further, banks are also advised to furnish the range of interest rates in which large value of business (say, 60 per cent or more) is contracted so that RBI can monitor the general trend in lending rate charged by banks in India.

The processed data is available on the RBI web-site and updated every quarter. The data since quarters ended June and September 2002 are now available on the website. Table 1 provides the bank-group wise consolidated data on the range of actual lending rates of credit above Rs. 2 lakh other than export credit. Table 2 presents bank-group wise range of median interest rates on credit above Rs.2 lakh other than export credit. Table 3 presents bank-group wise range of actual lending rates on Export Credit and Table 4 provides bank-group wise median interest rates on export credit. Table 5 presents lending rates of individual banks on export credit as well as other credit above Rs.2 lakh under demand and term loans.

While presenting data for individual banks, the BPLR represents the range of PLRs of banks on various products and tenors. The median range is arrived at separately as the range of medians of all minimum BPLRs of banks and all maximum BPLRs.