BoM hints at cutting lending rate

Public sector lender Bank of Maharashtra (BoM) might effect a lending rate cut in some segments next week, according to Chairman and Managing Director M D Mallya.

"We might effect an interest rate cut in the range of 0.25-0.50 per cent in some segments. But, there will not be an across-the-board reduction" said Mallya. While cutting rates, the bank would take care to see that its existing customers were benefited, he said.

The bank's asset-liability committee (ALCO) was scheduled to meet next week and would review its lending rates, Mallya said.

According to him, cost of funds for the bank and for the banking industry as a whole is likely to come down and lenders would consider this factor as well when reviewing their lending rates.

The country's premier housing finance company, HDFC, had recently announced a 0.25 per cent cut in its retail prime lending rates (RPLR), shortly after the apex bank hinted that there was a strong case for banks for a rate cut in its quarterly policy review.

The bank achieved a 35.06 per cent growth in net profit for the quarter ended December 31, 2007.

Net profit grew to Rs 100.38 crore during the quarter from Rs 74.32 crore in the year-ago period, while total income rose to Rs 985.97 crore from Rs 765.30 crore on a year-on-year basis.