cent despite the adverse effect of drought and uncertainty on account of oil prices. as the inflation rate has decelerated, it has also had a positive impact on inflationary expectations. this is clearly reflected in the downward trend in nominal interest rates. for instance, the overnight call money rate has fallen sharply from about 13 per cent in august 2000 to the current levels of 5. 5 per cent. similarly, the 91 - day treasury bill rate declined from 10. 5 per cent to 5. 4 per cent and the 364 - day treasury bill rate from 10. 9 per cent to 5. 6 per cent over the same period. the long - term interest rates too have declined. the yield on 10 - year government securities has declined from 11. 5 per cent in august 2000 to the current levels of about 6. 3 per cent. similarly, interest rates on corporate paper have fallen significantly. for example, the interest rate on 5 - year aaa rated corporate paper has declined from 12 per cent in august 2000 to about 6. 7 per cent currently. the banks have also reduced their deposit rates. the term deposit rates of public sector banks over one year maturity have declined from a range of 8 - 10 per cent in august 2000 to 6 - 8 per cent now. this fall in the interest rates in the recent period has been in consonance with the monetary policy stance of a soft and a flexible interest rate regime. despite the fall in deposit rates, depositors have received positive real interest rates of close to 2 per cent in the second half of the 1990s, which is much higher than the real return on deposits during the first half of the 1990s. on the other hand, lending rates of banks have not come down as much. while banks have reduced their prime lending rates ( plrs ) to some extent and are also extending sub - plr loans, effective lending rates continue to remain high ( table 1 and graph 1 ). it is estimated that the average lending rate of scheduled commercial banks has declined from a peak of about 17 per cent in 1995 - 96 to about 14 per cent by 2001 - 02. hence, while nominal interest rates have come down, they have not fallen as much as the inflation rate. consequently, the effective real lending rate continues to remain high. this development has adverse systemic implications, especially in a country like india where interest cost as a proportion of sales of corporates are much higher as compared to many emerging economies. table 1 real interest rates year weighted weighted average

centres. this work is also very much a public sector – private sector partnership. we are being ably and vigorously supported in this work by a group of market participants, chaired by david puth, ceo of cls. the group contains people from all around the world on the buy side, including corporates and asset managers, and the sell side, along with trading platforms, ecns and nonbank participants, drawing from the various foreign exchange committees ( fxcs ) and beyond. hugh killen from westpac is the australian member of this group, representing the australian foreign exchange committee ( afxc ). all parts of the market are being involved in the drafting of the code to make sure all perspectives are heard and appropriately reflected. there are two important points worth highlighting : first, it ’ s a single code for the whole industry and second, it ’ s a global code. on the first point, the code is replacing the existing codes of conduct that have been present in the fx market, including the aci model code used here in australia. importantly, the code covers 1 / 3 bis central bankers'speeches all of the wholesale fx industry. this is not a code of conduct for just the sell side. it is there for the sell side, the buy side, non - bank participants and the platforms ; its breadth is both across the globe and across the whole structure of the industry. hence the code is relevant for all of you here in this room. the way it is relevant will depend on your engagement with the market. the guidelines for appropriate conduct are relevant for the buy side as well as the sell side. on the buy side it will also help to give you guidance as to what you can reasonably expect from your counterparty as you transact your fx business. as i mentioned earlier, the first phase of the code was released earlier this year. it covers areas such as ethics, information sharing, aspects of execution and confirmation and settlement. we are well advanced with the second phase which is covering further aspects of execution including e - trading and platforms, prime brokerage, as well as governance, and risk management and compliance. we are currently in the process of incorporating nearly 2000 comments received from market participants on the draft that we circulated in early october. we will be sending out a revised version for comment in the first week of december. the distribution to market participants will be principally through the fxcs but also through other industry associations as well. again, we are endeavouring to