The new base rate regime for interest rates that is to become effective from Thursday is unlikely to impact the customers immediately, Vijaya Bank Chairman and Managing Director Albert Tauro said on Wednesday.
“The Reserve Bank of India (RBI) has given banks a window of six months to rework interest rates,” Mr. Tauro told presspersons after launching online trading services of the bank. The base rate of Vijaya Bank would be between 8 per cent and 8.5 per cent, he said.
Mr. Tauro said that only the lending rates for priority sectors such as agriculture and exports would be lower than the base rate. Asked whether the bank would be adversely impacted, especially by big banks offering competitive rates, he admitted that the bank would be affected marginally. “Though we will be affected, big banks also cannot entertain everyone, as prudential norms have to be followed. We are also hoping the ‘relationship' banking to attract our customers,” Mr. Tauro added.
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The new online trading services launched by Vijaya Bank, in association with IDBI Capital Market Services, will enable customers to trade in equity, IPOs, mutual funds and other assets. While the bank will offer savings and demat facilities, IDBI Capital will facilitate trading.
Meanwhile, State Bank of Mysore has set its base rate at 7.75 per cent while Canara Bank has set its base rate at 8 per cent.