The interest-rate structure of banks will be destabilised in the short run if rates on savings accounts are deregulated, cautioned Mr K.R. Kamath, Chairman and Managing Director, Punjab National Bank.

“SB (savings-bank) rate is the anchor on which we build all our interest rates and if you destabilise it and allow it to float then it will destabilise the entire rate structure in the short run,” Mr Kamath said while speaking to newspersons on the sidelines of a banking conclave organised by the Federation of Indian Chambers of Commerce and Industry here on Wednesday.

Mr Kamath further explained that mere deregulation might not benefit customers. “There is a need to deregulate the SB-account product as a whole. For instance, if the SB rates are deregulated but if a bank puts a cap saying that a customer will have to maintain a certain minimum balance to get attractive rates then it (the deregulation) will defy the purpose,” he pointed out.

The bank aims to achieve 20 per cent and 22 per cent growth in credit and deposits, respectively, this financial year.

The bank plans to recruit 9,000 people this year to fill up the vacuum likely to be created by staff superannuating at various levels.

Recruitment drive

“We plan to recruit 3,000 officers and 6,000 clerks. We have started the hiring procedure but the process may spill over to next year,” he said. The bank has already conducted written examinations for both the categories and interviews for clerks will start soon, he said.

Co-branded credit card

With a view to enhance its credit-card business, the bank launched a co-branded corporate credit card with Institute of Cost and Works Accountants of India. The bank expects to issue about 35,000 cards under the tie-up.

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