The Hindu Business Line : Three banks to hike prime lending rates by 50 bps

Punjab National Bank (PNB) on Friday announced an upward revision in its benchmark prime lending rate (BPLR) as well as its home loan and auto loan rates by 50 basis points each.

The bank has also decided to increase the deposit rates from 25 basis points to 50 basis points in some of the time slabs.

With this move, the BPLR of the bank stands revised to 13 per cent from 12.5 per cent. The revised BPLR would be applicable for existing and new accounts, wherever the interest rates are linked with BPLR, a PNB official said.

These decisions, which were taken at a meeting of the Asset Liability Committee (ALCO) meeting of the bank here today, has come in response to the various monetary measures taken by the Reserve Bank of India recently.

A statement issued by PNB said that these rates would come into effect from July 1. The impact of all these measures, coupled with better asset liability management, would be revenue neutral, the statement added.

The BPLR was last revised upwards by the bank on April 16, 2007.

Since then, repo rate has been hiked from time to time to 8.50 per cent and Cash Reserve Ratio to 8.75 per cent, thus impacting the bank’s cost of funds.

Corporation Bank

Mr B. Sambamurthy

Our Mangalore Bureau reports: Corporation Bank will increase its prime lending rate by 50 basis points with effect from July 1. Mr B. Sambamurthy, Chairman and Managing Director of the bank, told Business Line here on Friday that the bank will increase its benchmark PLR from 13 per cent per annum to 13.5 per cent per annum with effect from July 1.

Known as COBAR (Corporation Bank Benchmark Advance Rate), it was last revised on March 15.

On deposit rates, Mr Sambamurthy said the bank has increased deposit rates from 25 basis points to 100 basis points in various maturities. It was hiked on June 25, he added.

Bank of India is also likely to announce a hike in PLR by 50 basis points with effect from July 1.

When asked about a rate hike, Mr T.S. Narayanasami, Chairman and Managing Director, Bank of India, said, “We will have to follow suite. Others have set the trend. Our asset liability management committee will meet on Monday.” About deposit rates, he said that it will depend on whether the bank requires long term or short term credit.

Catholic Syrian Bank

Mr R. Venkataraman

Our Coimbatore Bureau reports: Thrissur-headquartered Catholic Syrian Bank plans to increase its prime lending rate by 50 basis points to 15 per cent from July 1.

Stating that CSB did not wait for others to make the move and had decided much earlier on the 50-basis-point increase, its Chairman and CEO, Mr R. Venkataraman, said “inflation is looking large, but we cannot afford to compromise on growth”.

The bank would focus on reducing its cost of funds and enhancing customer base. “It is an opportune time. The stock markets are not looking good; most Indians would take the traditional route by looking at banks to park their savings.”

On lending, he said, “we have to watch the market with caution” and focus on the SME segment. Besides SMEs, the would focus on the rural and semi-urban pockets.

“We are a niche player in these areas.” On farm loan waiver, Mr Venkataraman said, “it is not much, only about Rs 12 crore.”

Mr Venkataraman was present here at the launch of CSB’s Mobile ATM. Speaking to Business Line on the sidelines of the launch, he said, “we have the licence to operate seven mobile ATMs, three of which would be in Tamil Nadu.”

The first mobile ATM in the State was kicked off in Tirupur this morning. The third mobile ATM is to be launched in Chennai on Monday.

The rest would be operated in Kerala.

Related Stories:
SBI, Union Bank hike lending rate by 50 bps
Loans set to become dearer

More Stories on : Interest Rates | Public Sector Banks | Punjab National Bank

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