Canara Bank not to hike rates for now

Canara Bank is not looking to increase its lending or deposit rates for now. The RBI had hiked its repo rate — rate at which RBI lends to commercial banks — by 25 basis points on Friday.

“There is no proposal to hike the base rate”, R. K. Dubey, Chairman and Managing Director, Canara Bank told Business Line here on Saturday. Base rate is the rate below which a bank cannot lend. Canara Bank’s base rate is currently at 9.95 per cent. It was brought down from 10.25 per cent to 9.95 per cent in July.

Dubey was in the capital for the inauguration of new lead bank offices at three districts —New Delhi, Central Delhi and West Delhi.

Till recently, districts in metropolitan areas were kept out of the purview of lead bank schemes. Considering the financial exclusion in metropolitan areas, RBI had in July assigned lead bank responsibilities in such areas to various banks. Canara Bank was allotted three districts in Delhi.

Prior to this, Canara Bank had lead bank responsibilities in 26 lead districts spread across 5 States.

RBI’s lead bank scheme was introduced in 1969 to designate banks with responsibility of identifying growth centres, assessing deposit potential and credit gaps and evolving a coordinated approach to credit deployment in each district.

BRANCH EXPANSION

Dubey also said that the bank was looking to expand its network to 4,500 branches by the end of the current fiscal.

As on date, Canara Bank is one of the largest commercial banks in the country with a network of 4,101 branches and an almost equal number of ATMs (3,961). “We have opened 350 branches so far this financial year. We will open another 350 before this fiscal end.”

Dubey expressed confidence over the bank achieving a net interest margin of 2.3 per cent this fiscal. This is despite headwinds such as volatility in G-sec rates and increased provisioning towards stressed assets.

srivats.kr@thehindu.co.in

Source: thehindubusinessline