Base Rate Calculation Guidelines for Banks Soon: RBI Deputy Governor
Dec 09, 2015: The Deputy Governor of RBI Mr. S S Mundra said that Reserve Bank of India will soon circulate the guidelines to calculate Base Rate taking into consideration marginal cost of funds. It will ensure effective monetary policy transmission.
The minimum benchmark below which a bank can not lend is known as Base Rate of that bank.
When asked about SDR (Strategic Debt Restructuring), he said that the window is not completely opened. So we can’t say that it is not functioning.
"They (banks) have been given a window of 18 months. At this point of time, they are putting SDR in cases that are eligible. I think it's premature to say they (banks) are unable to find buyers," he said here.
The SDR scheme allows the banks to take majority ownerships of the firms that are not functioning properly. Banks can classify NPAs as standard assets during the 18 months.