The Hindu Business Line : `Further hardening of interest rates unlikely with surplus liquidity'

MORE OFFERINGS: Mr V.P. Shetty, CMD, IDBI Bank, and Mr O.V. Bundellu, Deputy Managing Director, at the bank's AGM in Mumbai on Friday. — Shashi Ashiwal

Mumbai June 22 "The interest rates have peaked but might soften to some extent in the short term, though it is difficult to give a perspective on this for the medium and long term," said Mr V.P. Shetty, Chairman and Managing Director, IDBI Bank, on the sidelines of its annual general meeting in Mumbai on Friday.

Mr Shetty felt that the overall liquidity in the system gave an impression of a comfortable situation and that under such a situation the interest rates might not harden further.

IDBI Bank plans to increase its retail portfolio to about 20-22 per cent of its total portfolio in fiscal 2007-08.

"We will look at introducing car loans in three months' time and will also concentrate on personal and educational loans among others, though home loans will continue to constitute a major chunk of the total retail portfolio," Mr O.V. Bundellu, Deputy Managing Director, IDBI Bank, said. The bank also plans to expand its canvas of lending opportunities by funding merger and acquisition deals by Indian corporates and intensifying infrastructure financing, while at the same time bringing down its cost of funds.

To cater to the needs of the rural customers and to bring about greater financial inclusion, the bank plans to roll out a mobile branch (a branch in a van which will move from one village to another).

Mobile branch

"The mobile branch will be attached to the Satara branch of the bank and will have a cash dispensing Automated Teller Machine and facilities to carry on all retail banking transactions," said Mr Shetty.

The mobile branch will initially cover six villages in and around Satara district, and farmers are expected to constitute a major share of the clientele. "The farmers will be given `no frills' accounts which will be operated by means of biometric cards," said Mr Bundellu.

New Chairman

IDBI today informed the BSE that it has appointed Mr Yogesh Agarwal, who is at present the Managing Director of State Bank of India, as the Chairman of the company, for a period up to June 30, 2010.

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