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Public sector lender Canara Bank’s chief R K Dubey ruled out a reduction in policy interest rate in the next one or two months at least.
“In the coming two months, food inflation should come down and when it consistently comes down only then we could see a rate cut. So, I expect a movement in interest rate by January or February… It could be around 25 to 50 basis points and by March if inflation goes (down) the way it has been planned then we may see a rate of 1 per cent also, said RK Dubey, Chairman and Managing Director, Canara Bank.
Further, the bank’s fund raising plan of Rs 3,500 crore has been delayed to November as it awaits approval from the Government.
“We have started the process of QIP (quantitative institutional payment) and are ready for it but will not happen this quarter. We have got approval (from shareholders) in June but we await an approval from the government. It may happen in October or first fortnight of November,” Dubey said.
On the deposit rate cut as done by SBI, Dubey said, “Every bank has a different asset liability mismatch and depending on that our ALCO (Asset Liability Committee) will decide.
Dubey also said there has been no sale of NPAs (non-performing assets) after the new norms set out by the RBI. There is no pick up. Till now there has been no sale. With 15% (upfront cash by ARCs to banks) it is tough, things have changed as every bank is in the market. Till last quarter it happened without any hassle, he added.
According to him, fresh NPAs or slippages have reduced considerably. “By September, NPAs should go down. We have a gross NPA of 2.6 per cent as on June 2014 (it was 2.4 per cent as on March 2014, 2014) and may go down to 2.4 per cent. If there is sale of NPAs it can be 2.2 per cent or if no sale then 2.5 per cent,” Dubey said adding that corporate credit is still slow.
“Our retail, SME and agriculture growth is robust at about 25-40 per cent. Even if corporate credit grows at 10-15 per cent, we will meet our target of 16-17 per cent credit growth,” he said.
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