The Hindu Business Line : Rate cut: PNB to await RBI cues

Mumbai, Jan. 7 Punjab National Bank will wait for the Reserve Bank of India’s signals in the Credit Policy before taking a decision on cutting lending rates, Dr K.C. Chakrabarty, Chairman, PNB, said here on Monday.

“Before we cut interest rates, we have to take into consideration issues such as improving efficiencies and margins. The margins are under pressure because of competition. Banks are offering higher deposit rates and lower lending rates,” he said

The bank expects to see a year-on-year credit growth of 24 per cent in the third quarter of the fiscal.

Shanghai branch

It informed the Bombay Stock Exchange on Monday that RBI has accorded approval for upgrading its Shanghai Representative Office to a branch in China.

Consolidation not now

On mergers and acquisitions in the banking sector, Dr Chakrabarty said that it would take three to four years before the process of consolidation takes place.

“Around 75 per cent of the population has no access to a bank account, 80 per cent is not covered by any form of insurance and 98 per cent are not participating in the capital market. In such a situation, financial inclusion should come in before consolidation takes place,” Dr Chakrabarty said.

On the proposed life insurance joint venture with the US-based Principal Financial group and Vijaya Bank, Dr Chakrabarty said that a decision about going ahead or exiting the partnership would be taken in three to six months.

Dr Chakrabarty now heads a CII committee for encouraging interface within the banking industry on key issues. The committee plans to take up issues related to infrastructure spending.

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

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