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| The formula was expected to be ready in a few days, V Leeladhar, chairman of the association, told reporters here today. |
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| The credit policy review earlier in the day had said the association "should advise banks on the benchmark prime lending rate, keeping in view the operational guidelines". A sub-group has been formed in the association for evolving the formula. |
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| Leeladhar and other bankers present at a meeting with RBI Governor YV Reddy earlier in the day made it clear that they were not opposed to the concept of a benchmark prime lending rate, but "rather in putting it into operation". |
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| "The formula will just give the broad guidelines to banks, which can work out their benchmark rates based on individual asset-liability, cost of deposits and other parameters," Dena Bank Chairman A G Joshi said. The banks will then make the benchmark public. |
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| H N Sinor, chief executive of the Indian Banks' Association, said the main issue was transparency and ease of action, which was expected to be addressed with the establishment of a benchmark prime lending rate. |
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| Explaining the difficulty of having a uniform prime lending rate, Joshi said all banks were not the same in terms of reach, coverage, cost of funds, overhead costs and earnings. |
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| While the RBI did not announce rate cuts, bankers said each bank would be taking stock of the situation in order to explore the possibility of cutting rates. |
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| There were reports that some banks could be cutting rates, but Leeladhar said the decision would be taken by each bank according to its assessment of the situation. |
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