The Hindu : IBA to take up 'Vision 2010' report

Online edition of India's National Newspaper
Wednesday, Dec 10, 2003

Business

Business

IBA to take up 'Vision 2010' report

MUMBAI DEC. 8. The Indian Banks' Association (IBA) board is to consider tomorrow the `Vision 2010' report, which charts out the growth path for banks, even as it expects lending rates to fall with the introduction of the benchmark-prime lending rate (B-PLR) by banks in early part of next month.

"The IBA board will take on account the `Vision 2010' report submitted by the Indian Overseas Bank CMD, S. C. Gupta, highlighting the future growth areas for banks in the competitive environment,'' the IBA Chairman, V. Leeladhar, told newspersons here today after announcing the two day Bank Economists' Conference to be held here from December 11.

The study was commissioned six months ago and it would help banks chart their future growth strategy, he added.

On the B-PLR, he said, "The general indication is that there might be a slight decline in PLR in this new method.''

The calculation of a PLR at present was not based on a scientific basis but now the board, instead of the asset liability committee, would have to take into consideration various aspects while deciding the B-PLR, he said.

Following the Reserve Bank of India direction, the IBA has already issued broad guidelines on introduction of B-PLR stating it must be calculated on the basis of weighted average cost of funds, average cost of operations, appropriate provisioning/capital charge and profit margin, he said, adding, "we expect banks to announce their B-PLR in early part of next month.'' However, it would not be applicable to housing loans, consumer loans, and other non-priority sector personal loans among others, he said. — PTI

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