PLR may fall further if inflation, deposit cost fall: PNB

   
Chandigarh Press Trust of India Lending rates could further go down by 1 per cent if inflation comes down to a level of 4 per cent and deposits rates fall below 8 per cent, PNB Chairman and Managing Director K C Chakrabarty said today.
   
"There could be a possibility of prime lending rate (PLR) coming at level of 10.5 per cent from 11.5 per cent at present provided inflation reaches the RBI projected level of 4 per cent and cost of deposits falls," he told reporters here.
    
He observed that although inflation had come down from 5 per cent level but still consumer price index was in double digit. "Consumer price index is still too high and it should come down which would further impact the overall inflation," he said.
      
Inflation has declined by 0.68 percentage points during the week ended January 31 from 5.07 per cent a week ago, mainly on account of reduction in prices of petrol, diesel and cooking gas, announced by the government on January 28. It was 4.74 per cent a year ago.
     
Noting that the cost of deposits or money was still high for the bankers in view of high risk pricing, Chakrabarty said because of structural problems, the cost of deposits for bankers was not coming down.
   
"How can our deposit cost fall when the government was borrowing money from the market at rate of 8 per cent," he said.