A fixed base rate will solve some of these problems – all loans, corporate or retail, must benchmark themselves to the base rate. (Note: Floating rate products can take on external benchmarks also – but that’s good enough if the bank doesn’t control the external benchmark. )
What this will do though, is show you the huge spread between what is offered to corporates and what you and I get. Where corporates can get loans at 7%, we can only get them at 10% or more; once they put in the base rate at 7% we get some negotiating room to eke out a better rate. But honestly most borrowers will be too ignorant to even check a bank website for it’s current base rate, so who am I kidding. All it will do right now is create a more competitive environment for certain banks.
ersonally, I’ve never met an overnight success. I’ve met people who’ve done something well for a long time and were suddenly discovered. Then everyone assumed they came out of nowhere, that their fame happened overnight.
But the real truth is that it takes a long time to be an overnight success.
Worthwhile as they are, recommendations merely reduce the size of the pile. Our next step is to determine which book is right one.