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| Govt borrowings not to raise lending rates: PNB |
| Press Trust of India / Chandigarh Jul 16, 2009, 16:26 IST |
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State-owned Punjab National Bank (PNB) today said the government's plan to borrow over Rs 4 lakh crore to fund its fiscal deficit is not going to push the lending rates northward as there is enough liquidity available in the market.
"I do not see any reason that the interest rates are going to increase because of the Centre's borrowing plans as there is enough liquidity in the market for lending," PNB Executive Director Nagesh Pydah told reporters here on the sidelines of the State Level Bankers Committee meet.
"The borrowings have been planned in such a way that it will not have any impact on the liquidity side," he said.
Interestingly, the latest statement by PNB comes within days of the country's top lender the State Bank of India saying that the rates might see an increase in the next couple of months.
In the Budget 2009-10, Union Finance Minister Pranab Mukherjee had pegged government borrowings at a whopping Rs 3.98 lakh crore in 2009-10 to fund its rising fiscal deficit.
PNB, which has the lowest prime lending rate of 11 per cent in the banking industry, is hoping to maintain a net interest margin (NIM) of 3.62 per cent in the current fiscal.
"We achieved NIM of 3.62 per cent in the last fiscal and even this year, we want to maintain it at the same level despite lowering of lending rates," he said.
In line with its strategy to expand in overseas market, PNB is now mulling to open offices in non-traditional markets like South Africa, Brazil, Russia, Norway and Canada. "We are planning to expand into these countries to increase our overseas presence," he said.
The bank already has a presence in Hong Kong, London, China, Kabul and Dubai. Besides, PNB also has plans to open 151 new branches in the current fiscal.
The bank is expecting its deposits to grow by 19 per cent and credit by 22 per cent this fiscal against an increase of 26 per cent in deposits and 34 per cent in advances last fiscal. The bank attained a business volume of Rs 3.65 lakh crore in 2008-09.
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