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Sunday, October 7, 2012

Central Bank to launch combo loans, cut deposit rates soon

Public sector lender Central Bank has said it will bring down its deposit rates further soon, to enable it to lower its lending rates, and will launch a combo loan offer within a fortnight.

“We are looking at cutting our base rate going forward. But to do that we have to first lower our deposit rates.

Accordingly, as liquidity is comfortable, we will soon cut the pricing of our liabilities shortly, which will be followed by a base rate cut,” the Chairman and Managing Director, M.V. Tanksale, told PTI here.

Speaking after inaugurating the 40th national convention of the Institute of Company Secretaries of India here on the weekend, Tanksale said the Mumbai-based lender will also be launching a combo loan offer— which means offering a car loan without the processing fee to a customer who has availed of a home loan within the fortnight.

On the rationale behind it, the chairman said, “Normally a home buyer looks for a new car too. So it makes sense for us to fund his car as we already know him/her. Also, credit growth has been a trickle so far this year. We need to ramp up our lending to meet the fiscal target.”

Several other public sector lenders such as State Bank, UCO Bank, Corporation Bank, Union Bank, United Bank, etc, have already come out with combo loan offers ahead of festive season.

The second quarter of the fiscal saw credit uptick almost flat at 0.1 per cent at 16.4 per cent. The Reserve Bank’s guidance for credit is 17-18 per cent.

Credit growth stood at 16.4 per cent, against the central banks projection of 17 per cent for the year during the fortnight ending September 14, according to the RBI data.


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