Base Rate

The Base Rate is the minimum interest rate of a Bank below which it cannot lend, except in cases allowed by Bank Negara Malaysia (BNM). Before the used of Base Rate, the interest rates were decided by BLR. As according to BNM, the new Base Rate framework will replace the current BLR system with effect from Jan 2, 2015.

Base Rate is more transparent then the BLR and banks are normally not allowed to lend below the base rate (except for cases specified by BNM). The calculations of BLR were mostly not transparent and banks were frequently lending below the BLR to their prime borrowers and also under pressure due to various reasons. Base Rate includes all those elements of lending rates that are common across all categories of borrowers. Banks may choose any benchmark to arrive at the Base Rate for a specific tenor that may be disclosed transparently.

There can be only one Base Rate for each bank. However, banks have the freedom to choose any benchmark to arrive at a single Base Rate but the same needs to disclose transparently.

All banks will not have one single / common Base Rate. Individual Banks will be able to determine any benchmark to arrive at the Base Rate for a specific tenor, as considered appropriate and

Check the latest BR on each bank HERE.

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