Issues in Asset Liability Management - VI

This article, in a series on asset liability management by commercial banks, discusses the principles governing the fixing of the prime lending rate. Actual pricing at times may have to differ from what is arrived at on the basis of the principles set out here - for competitive reasons, for instance. However, it will be prudent to undertake such deviations consciously and calculatedly - and with the idea of reverting to rational pricing when conditions permit.