More scope of cut in lending rates, says PNB chief

Country's second largest state-owned lender Punjab National Bank (PNB) today said that there is more scope for cut in lending rates.

"Interest rates will remain volatile and scope of reduction is there", PNB chairman K C Chakrabarty told reporters ahead of the meeting of bankers and industry chambers with the Cabinet Secretary K M Chandrasekar today.

The bank's Asset Liability Committee (Alco) will meet by the end of the month to take a view on the interest rates, the PNB chief said.

The Alco meeting will assume importance, as it would be held after the announcement of the annual monetary policy by the Reserve Bank of India on April 21.

Responding to the initiatives taken by the RBI, the PNB had reduced the benchmark prime lending rates by 50 basis points to 11.5 per cent with effect from February 1.

Pointing out that lending by PNB witnessed an increase of 28 per cent during 2008-09, Chakarbarty said, "Advances are expected to rise by 20 per cent in the current fiscal".

Having grown by 25 per cent in 2008-09, the PNB chief hoped that deposits could register a rise of 19 to 20 per cent during the new fiscal, which began yesterday.

Cabinet Secretary K M Chandrasekar is meeting the heads of major banks and representatives of the industry chambers to take stock of interest rates and availability of credit.