Mumbai, June 27 (UNI) Public sector lender Bank of India has increased its bechmark prime lending rate (BPLR) by 50 basis points with effect from July 1 and would increase deposit rates in the near-future.
Talking to the mediapersons here today, the Bank Chairman and Managing Director T S Narayanasami revealed the developments and said that there would be some moderation in credit growth following the increase in the BPLR, which would now go up to 13.25 per cent from the existign 12.75 per cent.
He said that the credit growth of 30 per cent last year would come down to 20 per cent current fiscal.
On the deposit rates, he said with the competition stiff there would be a matching increase in these rates as the interest margin would be under pressure. However, the Bank would take a final decision June 30 when the Board would meet.
He said the Bank would, however, be cautious in increasing lending rates further in certain sectors, including Eduction, Housing, Consumer and Auto. On credit to industries, he said that those who require credit for expansion would not mind a half a per cent increase in the rates as in the past interests had hovered over 18 per cent.
Asked about the liquidity position of the Bank, Mr Narayanaswamy said that it was comfortable and the bank would pass through the situation without much ado.
On further tightening of the monetary policy by the RBI, he said "it is a continuous process and the apex bank is likely to take significant measures to tame the soaring inflation as and when required." He attributed the present rise in inflation to the skyrocketing global oil prices, resulting in retail fuel price hike in the country earlier this month.
BoI was the third public sector bank in a row, after State Bank of India and Union Bank of India, to raise the plr by 50 bps within two days after the central bank hiked the key lending rate as well as cash reserve ratio by the same proportion.
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