BoI plans to cut savings bank rate

Taking cues from State Bank of India, Bank of India is also contemplating to effect a cut in its savings bank rate.

The bank's Executive Director, R A Sankaranarayanan, who was in the city to take part in an exporters' meet organised by the bank told presspersons that both savings bank rate and the interest rate on deposits are slated for a cut. “The savings bank account rate cut may not happen immediately, but is under consideration,” he added.

He said that the bank is looking to acquire good customers, through good referrals to improve the overall business.

Conceding that the bank has not organised such meets for quite a while now, he said: “The thrust was on recoveries and controlling slippages. Now, we are looking for quality business and appealing to our customers to refer good customers.”

The bank plans to focus on retail (including rural, housing and SME segment), good rated corporates and better exposure on export credit to improve its business mix, Sankaranarayanan said.

BoI's export credit is around 13 per cent of the bank's total advances of Rs 3.85 lakh crore.

To a query on base rate, he said: “Our one year MCLR stands at 8.40 per cent. We effected a 135 bps cut recently. But the borrowing rate would depend on the segment in which the customer operates, credit term, customer's risk profile, our long standing association with the said customer and so on. Interest rates may not fall much, unless there is a drop in our cost of funds” he added.

On GST preparedness, he said: “We have engaged a consultant; our systems are in tune with GST requirements. Test runs have been successful, but the new tax regime is evolving and all banks are gearing up to comply with the norms.''

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