New
Delhi: The
lending rate structure of public sector banks will come
under fresh scrutiny during the forthcoming meeting of
Finance Minister Yashwant Sinha with the chiefs of the
banks.
The review will be done
to assess the extent of the banks compliance with the Reserve
Bank of Indias (RBI) directive to ensure that the lending rates
reflect the prevalent low-interest rate regime.
The RBI had pointed out
that some banks have been maintaining "very high
spreads" over their prime-lending rate. It had urged them to
review the rates to ensure that the borrowers are able to access
credit at "reasonable interest rates." Banks may also
have to provide details of the level of transparency adopted by
them in fixing the lending rates as has been desired by the
central bank.
The RBI had asked banks to not only come out in the open about
their maximum and minimum lending rates but also to adopt an
"all-cost" concept for borrowers by providing details on
all charges, such as processing and service charges.
The review of lending
rates forms part of the formal agenda of the meeting, which has
been now rescheduled for 29 June 2002. The meeting,
originally fixed for 19 June 2002, was rescheduled due to Sinhas
visit abroad.
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