PNB may cut lending, deposit rates by 50-100 bps

The country's second-largest public sector lender, Punjab National Bank, today said it may reduce its lending and deposit rates by up to 100 basis points.     

"Scope for rate cut is always there. We could have a 50 to 100 basis points rate cut," PNB Chairman and Managing Director K C Chakraborty said here today.      

The Bank's Assets and Liability Committee (ALCO) is meeting today and will decide on rate cuts.      

The rate cuts, he said, would be done in lending as well as deposit rates as both have to move together.      

The RBI, in its annual monetary policy 2009-10, has reduced short-term lending and borrowing rates by 25 basis points each.     

The central bank reduced the reverse repo rate and repo rate by 25 basis points each to 3.25% and 4.75 per cent to spur growth.

Meanwhile, Chakraborty added that the Bank is looking at adding up to one crore additional customers this year. Besides, the bank also has plans to recruit 1,000 people in the current fiscal.    

The Bank expects 18-20% growth in deposits to Rs 38,000-40,000 crore this fiscal, he said.     

While NPAs of the bank could rise from the current Rs 4 crore to Rs 5 crore this year, the Bank's net interest margin is expected to be at 3.5%, he added.