Introduction of base rate regime is welcome step:
``The introduction of the base rate regime is a welcome step towards bringing better transparency of the minimum lending rate across banks. This has to be viewed from 2 angles -- impact on the existing borrowers and new For existing borrowers, this is not expected to make any difference to the rate at which existing loans have been contracted. What remains to be seen is rate switchover that banks would use when loans come up for renewal as existing rates are expected to continue as they are, unless anyone has rates lower than base rate. For new borrowers, base rate will apply. However, as borrowing rates in the economy have not changed, no substantial difference is expected between BPLR linked rates and new regime''.
State Bank of India, on Tuesday fixed its base rate for lending at 7.5 percent per annum which would be effective from July 1.