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A.J. Vinayak

Mr R.V. Shastri

Mangalore , Dec. 26

CANARA Bank is unlikely to increase interest rates on housing loans in near future. the Chairman and Managing Director of Canara Bank, Mr R.V. Shastri, told Business Line: "There is no stepping up of interest rates on housing loans".

His statement assumes significance as only recently RBI officials had warned banks against "cutting corners in dispensing housing loans".

Canara Bank last revised its housing loan rates on December 11. Mr Shastri stated that the bank has disbursed nearly Rs 2,100 crore under the housing finance sector.

Union Bank of India, however, has taken a lead by increasing 50 basis points in its housing loans of all maturities with effect from January 1, 2004.

Mr Shastri stated that Canara Bank would open its overseas banking unit (OBU) in Noida by January end. Permission of RBI has been sought for representative's office in Shanghai, and is likely to be set up in three months. The bank has six exchange houses in UAE, and RBI's permission has been sought for a representative's office in Dubai, he said.

On expansion of branches, Mr Shastri said that the bank has set a target to set up 2,500 branches by June 2005, and it has been setting up 40 to 50 branches every year.

Recovery is good in agriculture finance sector, and the bank is likely to soften rates for agriculture and small-scale industries sectors in January, he said.

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