The BPLR was the interest rate that commercial banks charge their most credit-worthy customers. Banks are free to fix BPLR with their board approval. The BPLR system has been drawing flak from various quarters since banks have been lending to highly rated corporates below their benchmark rate, making the system irrelevant.
The RBI is hoping to increase transparency in lending, and improve the way changes in monetary policy are transmitted to the economy by making banks establish a rate that approximates what they’ll charge their top-rated customers. Riskier borrowers pay above this and the banks are not allowed to go below.
The idea is to avoid a repeat of the boom, when competition for business and easy liquidity meant 70% of outstanding bank loans were priced below the banks’ internal benchmarks by March 2009. At State Bank of India, the country’s largest lender by assets, that benchmark was 11.75% last year. The average yield on its loan book, meanwhile, was 9.66%. The global problem of ensuring banks do not take outsized risks is addressed in India by this initiative of the RBI.
The way the new system is expected to be more sensitive to policy changes. Till now, India’s oil marketing companies borrowed at rates as low as 5%. They will have to pay higher interests. They could start to look elsewhere for funds, with one potential outcome a bigger and more liquid corporate bond market. Smaller scale borrowers and individuals will benefit. This group often wound up paying hefty premiums to internal benchmarks, to compensate for the discounts given to big borrowers. The move may hit the existing home loan borrowers. But the impact on the existing home loans due to the base rate may be as low as plus or minus 25 basis points (bps, a hundred of which would amount to one per cent). The era of Teaser Rates, the rates below BPLR set by the banks wil end now, but the rupee loans to exporters engaged in four labour-intensive sectors—handicrafts, carpets, handlooms and SMEs will be at exempted from the base rate system, but the lending rate to these sectors cannot fall below 7%.
Overall, it is considered as a critical step for the Indian economy, when it comes to long-term stability – even if it casts a short-term shadow over credit growth.
Base rates(PA) of various banks are given below.
Banks Base Rate (PA)
State Bank of India 7.5%
Punjab National Bank 8%
Bank of Baroda 8%
Union Bank 8%
Central Bank of India 8%
Bank of Rajasthan 8%
Indian Bank 8%
Uco Bank 8%
IDBI Bank 8%
Indian Bank 8%
Dhanlaxmi Bank 7%
Federal Bank 7.75%
State Bank of Mysore 7.75%
Corporation Bank 7.75%
Karur Vysya Bank 8.5%
Canara Bank 8%
Indian Overseas Bank 8.25%
The declaration to the police set off four raids in which the authorities seized hundreds of case files from the commission’s current leader, detained a group of bishops for more than nine hours and disturbed the tomb of a cardinal where construction work had recently been done. Investigators drilled into the tomb and lowered a camera, but found only the remains.
Investigators are now analyzing more than two truckloads of seized documents, many related to 475 complaints lodged with the sex-abuse commission after the resignation in April of a popular bishop who admitted that, early in his career, he had molested a boy.
The former head of the commission, Godelieve Halsberghe, said in an interview with a Flemish newspaper, Het Nieuwsblad, that she had gone to the authorities after receiving a call from a man who did not identify himself and warned her in French to “watch out” for herself and to secure the documents she held on about 30 cases she had handled during her tenure at the commission, from 2000 to 2008.
Ms. Halsberghe, now a retired magistrate, has long been critical of the church’s efforts in Belgium to confront its past. Alarmed by the phone call, she took the documents in her keeping to the authorities and warned them that the church might be hiding others. On Monday, she declined to accept calls.
The Belgian prosecutor’s office — the object of Vatican fury over the raids — confirmed that there had been a formal accusation but declined to discuss the source. “We are working on a specific case about a specific declaration,” said a spokesman, said Jean-Marc Meilleur. “We are not starting an inquisition against the church.”
Ms. Halsberghe’s case records, she told the newspaper, included documents from victims and records of conversations with Cardinal Godfried Danneels, who retired in January and whose home was among the targets of the Belgian raids last week.
Over the next few weeks, investigators will be comparing records from the church and the commission to evaluate whether some cases had remained secret, they said.
Church officials said they remained mystified by the police action and continued to denounce the disruption of the tomb and question its purpose. Eric de Beukelaer, a spokesman for the leader of the Belgium church, said: “When we were told, we could hardly believe it. Maybe they have a good reason for doing that, but we are here guessing.”
Ms. Halsberghe’s successor at the church commission, Peter Adriaenssens, resigned Monday along with other members, complaining that the Belgian authorities had let their group collect information as the complaints flooded in after the resignation of Bishop Roger Vangheluwe, and pounced as the flow began to dwindle.
“We were bait,” Mr. Adriaenssens told reporters on Monday, before being questioned by investigators.
Prosecutors are considering whether to expand beyond gathering evidence against abusers to encompass those who knew children were in peril but failed to protect them. “You have a part of a case that could be against the ones who committed the crimes and you also could have another part of the case against those who didn’t help someone who was in danger,” Mr. Meilleur said.
On Tuesday, the Vatican will honor the head of the Belgian church, Archbishop André-Joseph Léonard, who was one of the clerics held and questioned last week at the ornate palace of the archbishop of Mechelen-Brussels. The archbishop will be one of 30 church officials to receive the pallium, a vestment worn by the pope that is conferred as a mark of association with the papacy and its powers.
For Indian youth, wrote a columnist in the Times of India, politics had become “a sphere of terrible murkiness”, symbolised by greed, ruthlessness and violence. Yet the young fellow had changed all this. Through “talent hunts, membership drives and student meetings” he had made young Indians believe that politics was a realm that could extend beyond the “narrowness of nepotism”. He had empowered a new breed of “Real Young Turks” as opposed to “Privileged Young Jerks”. He was “the most refreshing arrival on the political block since decades”.
A couple of points briefly trouble the mind over this assessment. First, Rahul Gandhi, more than any of his 1.2 billion compatriates, is the embodiment of privilege, and hardly an encroaching outsider. In colonial days his great-great-grandfather led the Congress party. His great-grandfather, grandmother and father became prime ministers (Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi respectively). Privilege comes at a terrible price. Both grandmother and father were assassinated. All the same, his family, like no other, has shaped the course of the republic. It believes in its due.
Today Congress stands ready to do the family’s bidding, like a well-upholstered Ambassador car always at the front door. A second, even more impressive vehicle, known simply as India, boasts wheels of state, and its chauffeur is respectfully called “prime minister”. It offers an exhilarating if often erratic ride (it belches smoke and lurches in unexpected directions, when it is not stuck in traffic). It is currently on loan to a loyal and honest retainer, Manmohan Singh, no mean driver for a man of his years. But this car is Rahul’s heirloom. It is just a question of time before he asks for the keys back.
A second troubling point has to do with all the recent references to Rahul’s youthful age. Forty, after all, is not really that young. By then a man might be expected to have made his mark in the world, rather than be celebrating his coming-of-age. By the time they were Rahul’s age, Mozart and Alexander the Great had both been dead for several years. At 33 Jesus Christ had preached, healed, died and risen. The comparison is not wholly unfair, since Rahul’s disciples talk of him as India’s saviour.
Consider, too, his own family. By Rahul’s age Nehru had already spent several years in British imperial jails; thanks to his enormous charm and political talents he had ascended to lead Congress by 34. By 40 Rajiv had been elected prime minister, admittedly as much thanks to a wave of sympathy after the assassination of his mother as on his own merits.
Rahul Gandhi, by contrast, though officially general secretary of Congress, has no place in government, while his mother, Sonia, grips the party tight. To be sure, being viewed as a political outsider keeps Rahul’s image pure. He is, at once, everywhere and nowhere. Mr Gandhi’s face is on billboards across the country, and television shows him descending by helicopter towards vast crowds of rural folk, the kind whom his grandmother, Indira, considered to be her beloved poor. But Mr Gandhi’s thoughts on policy remain a mystery. And as for press conferences or interviews that might test his mettle, forget it.
To set against these doubts is one very big plus. For the past three or so years, Mr Gandhi has campaigned relentlessly, often staying with the poor—no politician has travelled more. His energies help explain Congress’s unexpectedly strong showing in general elections last year.
More than that, Mr Gandhi, through the party’s youth wing, is rebuilding Congress from the ground up. His efforts include not just membership drives but also a measure of intra-party democracy. There are limits: no one is suggesting that party panjandrums should be liable to be voted out, let alone the Gandhi clan. Still, it acknowledges Congress’s deep atrophy and lack of organisation—what one academic, Mahesh Rangarajan, calls its “lobotomisation” under Gandhi family sway, particularly Indira’s.
The efforts have paid off. In Punjab, Gujarat, Tamil Nadu and Bihar Congress’s fortunes have revived. But the big prize still to come is Uttar Pradesh, the most populous state with perhaps 180m people, which holds elections in 2012. For now, Mr Gandhi’s helicopter draws crowds of up to 100,000 coming to see the “Prince of India”. Success in Uttar Pradesh might prime Mr Gandhi for the big time. Some commentators speculate that might be when he steps into the prime minister’s shoes, while Mr Singh is ushered upstairs to the largely ceremonial presidency.
A riddle, wrapped in a mystery, inside a leader-in-waiting
Yet the question that remains is what Mr Gandhi believes in. Mr Singh, we know, seeks an “inclusive” growth that blends market liberalism with stronger state institutions. That is fine as far as it goes. But as Pratap Bhanu Mehta of the Centre for Policy Research puts it, he lacks the political clout to kick arse. So education and police reform and much more that could improve the security of the poorest are bogged down.
Does Mr Gandhi share Mr Singh’s views? Or, rather, like his mother and her mother-in-law before that, does he view India’s poor as deserving recipients of welfare rather than people to empower? Who knows? India’s thronging, unruly streets are a dangerous place in which to take the wheel, yet the learner driver remains an enigma.
Earlier in the morning, security forces fired warning shots and teargas shells to stop protesters defying the continuing curfew in Sopore.
The protestors were challenged while they were carrying the body of a youth killed in CRPF firing in a procession. Raising anti-government slogans, they were marching with the body of Bilal Ahmed Wani through the town.
When the procession reached the local police station, security forces fired in the air and lobbed teargas to disperse them