BPLR (Benchmark Prime Lending Rate) :
The BPLR is the charge per unit of measurement of involvement at which commercial banks tin lend coin to EACH OTHER as well as to only about large corporations. It is called benchmark charge per unit of measurement or benchmark lending because it is commonly used to calculate other rates of interest.
Base Rate :
The Base Rate is the minimum involvement charge per unit of measurement for whatever bank. I mean, the banking company cant lend yous coin for an involvement less than this Base Rate (you may assume that this is the Base of the Interest, as well as then that yous tin telephone phone it every bit Base Rate). Ofcourse, only about exceptions are likewise there. RBI allowed only about cases where Banks tin lend amount for involvement below the Base Rate except for DRI advances, They are loans to bank’s ain employees as well as banks’ depositors against their ain deposits etc.
Ofcourse, straight off a days nosotros are non using the benchmark lending or BPLR procedure every bit the Base Rate Concept came into the limelight. The BPLR is like shooting fish in a barrel becoming less concerned as well as is made applicable commonly solely on the loans which bring been sanctioned earlier the Base Rate has been made compulsory. But ofcourse, it is of import for us as, nosotros existence banking company examination aspirants, should acquire everything close BPLR 🙂
Difference betwixt BPLR as well as Base Rate :
A commission of RBI reviewed benchmark prime number lending charge per unit of measurement (BPLR) as well as introduced Base Rate to supersede the benchmark lending rate. The top dog deviation betwixt BPLR as well as Base Rate is transparency . When compared to BPLR, the Base Rate is much to a greater extent than transparent as well as banks are non allowed to lend below the base of operations charge per unit of measurement (except for cases specified yesteryear RBI every bit mentioned inwards the higher upwards definition). Base Rate is to endure reviewed yesteryear the respective banks at to the lowest degree on quarterly dry soil as well as should denote for public. On the other hand, the calculations of BPLR was by as well as large non transparent as well as banks were oft lending below the BPLR to their prime number borrowers as well as likewise nether describe per unit of measurement area due to diverse reasons.