Reserve Bank of India asks banks to pass on lower interest rate to the customers. In a move to make credit market more transparent, bank proposes to replace existing benchmark prime lending rate (BPLR) with a new base rate system.RBI in a draft guidlines to all commercial banks have said that the base rate system will replace BPLR from coming financial year. The new base rate system will be applicable for all new customers and for those old customers who come for a loan renewal. The base rate will be the minimum rate for all commercial banks, below which banks will not be permitted to lend.RBI expects that the deregulation of lending rates will increase the credit flow to small borrowers at reasonable rate. This system will prohibit any bank from extending any commercial loan including personal, auto, and home loans below base price rate.