The Hindu Business Line : Bank of Baroda has no plans to raise rates now

RETAIL LOAN FACTORY: Mr Vinod Rai (left), Special Secretary, Banking and Insurance, and Mr Anil K. Khandelwal, CMD, Bank Of Baroda, at the launch of Urban Retail Loan Factory in the Capital on Wednesday. - Ramesh Sharma

New Delhi , June 14

Bank of Baroda said on Wednesday that there were no immediate plans to raise interest rates, especially on home loans, on the back of the Reserve Bank of India's recent move to mark up its key short-term interest rates by 25 basis point.

"There is no immediate plan to increase interest rates even though there is pressure on our margins. We want to react with caution and prudence. We don't want to rush and increase. The situation is manageable, and not of any desperation," Mr Anil Khandelwal, Chairman and Managing Director of the bank, said on the sidelines of the launch of the bank's Urban Retail Loan Factory in the capital.

However, the bank is now negotiating better rates with corporates, although the intention is to move within the prime lending rates (PLR).

"The credibility of the PLR needs to be restored and our entire effort would be in that direction. About 60-70 per cent of the loans have been sub-PLR and corporates can afford to pay better rates within the PLR," he said.

On the urban retail loan factory, Mr Khandelwal said that this concept would be rolled out in 10 new locations including Chennai, Bangalore, Surat and Lucknow in the next few months.

Besides Delhi, the facility of urban retail loan factory has already been launched in Mumbai and Ahmedabad.

The retail loan factory concept is being ushered in primarily to facilitate quicker processing of retail loan applications.

The bank expects a 25 per cent credit growth in the current fiscal.

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