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For Jammu & Kashmir Bank, one of the country's ‘old' private banks, a cut in interest rates has come in handy. This is because it seeks to expand its corporate and SME lending outside its home State.
Terming the cut as “an act of rebalance towards checking inflation,” the Chairman of Jammu & Kashmir Bank, Mr Mushtaq Ahmad, told Business Line that it would help banks, (such as his), which had immense regional and pan-India lending opportunities, grow its loan book.
‘We will pass on the benefit of the cut to borrowers,' he added.
Base rate
The bank's base rate now stands at 10.5 per cent. “It is at least 25 to 50 bps lower than a couple of other banks. However, we will take a call on reducing it further. A 25 bps reduction is possible,” he said.
Answering a query, the J&K Bank Chief said that last fiscal was more turbulent than expected. “We do not foresee such high pressures this year. We have more retail and SME business within our fold. Our strong network should help us grow.”
The bank is targeting business growth of 25-30 per cent in its home State and slightly lower at, say, over 20 per cent across the other regions in the country.
“We are projecting higher growth in J&K because our CASA base is strong there as compared to rest of India. Our focus this fiscal would be on CASA and low cost deposits,” Mr Ahmad said.
On branch expansion, he said that the bank added 70 branches to its network of 600+ last year. “A majority of these were in J&K, including the additions. We plan to add another 100 branches to our network in our home State this year. Besides these, we have sought the RBI's permission to open around 25 branches in various States here.”
To cope with this expansion, the bank recruited around 1500 candidates last year. It plans to hire up to 500 people this year, across different cadres.
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