Banks in Kerala all set to hike prime lending rate
OUR BUREAU
KOCHI, Jan 17: Most of the Kerala-based private sector banks are planning to hike the interest rates on deposits and advances. This follows the RBI decision to hike the bank rate and cash reserve ratio with immediate effect.Federal Bank general manager C Bhaskaran said the director board of the bank would be meeting on January 20 to review the situation. He said the board would take up the issue of revising the lending-deposit rate in its meeting. He indicated the bank was likely to hike the prime lending rate by 1-2 per cent from the current level of 13.5 per cent. According to Bhaskaran the bank will have to increase its short-term deposit rate by at least 1 per cent following the increase in bank rates. He also said that the bank would open seven new branches before the close of current fiscal as a part of its ongoing expansion drive. Catholic Syrian Bank general manager Fredy George said the bank would decide about the new deposit rates on Monday. "Though the board is slated to meet only on
February 4, we may have to take quick decisions regarding interest rates on deposits", he added. This according to him is essential to retain the existing short-term funds with bank as well as to attract more funds. He said the bank was likely to hike the short term deposit rates by 1.5 to 2 per cent. The bank is also likely to increase its PLR by 1.5 to 2 per cent. However, the decision on this regard will be taken only at the next board meeting slated to be held on February 2, he added. "This does not make any inconvenience as we can always peg the PLR with retrospective effect," he added. The Thrissur-based South Indian Bank is also planning to increase the PLR by 1.5-2 per cent. The bank has currently pegged its PLR at 14.5 per cent. The SIB was also likely to increase its interest rates on short-term deposits by a minimum of 1 per cent, sources said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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