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No immediate increase in interest rates: Canara Bank

Written by: Staff

Bangalore, Mar 29: Canara Bank will not effect any immediate increase in the interest rates in view of the increasing inflation, Bank Chairman and Managing Director M B N Rao said today. Talking to reporters here, he said any change in interest rates would depend on how the Reserve Bank of India looks at the credit policy when it reviews it in April.

''Immediately we will not make any move either to increase or decrease the interest rates. The RBI would review the credit policy next month and aspects like liquidity and inflation will then be taken into consideration,'' he said. Mr Rao said the high inflation was caused more by the supply side than the demand side. Increasing prices in food, steel, crude oil and palm were causing spurt in inflation. ''We will have to see both at supply side and fiscal measures to contain inflation. Finance Minister P Chidambaram has already initiated steps to contain prices of essential commodities to ensure that it does not increase as steeply as it is at present,'' he said. He said the inflation would come down depending on the prices of crude oil and commodities like palm oil.

Canara Bank had brought down the prime lending rates twice in February by 25 basis points each and lowered interest on housing loans by 25 basis points. ''We have re-aligned the deposit rates accordingly. So immediately we will not be making any move on the interest rates,'' he said adding that 500 of the 2670 branches of Canara Bank had been implemented with core banking solution and the figure would go up to 1000 by the end of the next quarter. ''We will fully computerise all the branches by next year,'' he added.


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