The NPA situation has worsened during the quarter. Which sectors contributed to this
Slippages in this quarter were mainly from the infra, steel and pharma sectors and some of the EPC contractors. We don't have any stress on the international side. We had restructured loans that slipped into the NPA category; this was about Rs 1,100-1,200 crore. These include both small and big accounts. Asset quality is not a bank-specific issue; it reflects the state of the economy and we do expect slippages to slightly increase. After two quarters, we will see signs of asset quality improving.
What about restructured accounts
For the current quarter, we restructured about Rs 1,340 crore and, next quarter, it will be about the same, coming largely from EPC contractors. That is one segment where we are visibly seeing stress and the government has to take steps to release payment to vendors.
Net interest income grew significantly and boosted margins. What factors contributed to this
For the last three months, we have emphasised on recoveries and upgradtion of accounts. We have absolute focus on that, at zonal and branch levels. Our recovery and upgradation during the first six months has been more than what we did during the whole of last year. So, that is why you see the impact on the income side.
BoI cut deposit rates across some buckets recently. What is your view on lending rates
We had reduced deposit rates and we cut our lending rates six-to-seven months back. We reduced it from 10.75% to 10.20%. We have no immediate plans to reduce the base rate. We will look at it as the competition grows and, then, take a call. But deposit rates are on a downward trend. Different banks have cut rates in different buckets. Liquidity is not an issue right now; so, deposit rates will come off.