Punjab National Bank is likely to fix its base rate somewhere between 8 per cent and 8.5 per cent.
According to the bank's Chairman and Managing Director K. R. Kamath, the bank is in the process of firming up its base rate system (which is set to replace the existing Prime Lending Rate from July 1 this year).
Once the base rate is stabilised, it is expected to bring in a sort of equilibrium in lending rates by the bank.
Mr. Kamath, who was here on Thursday for the first time after assuming charge, told reporters that people securing credit below the base rate would have to gradually move up to the base rate and above. “This will eventually even out the ‘unequilibrium' in the interest rates,” he said.
Replying to queries the reports of possible hike in interest rates, he recalled the Reserve Bank of India's recent instruction to bank's to wait for further policy measures.
“The RBI doesn't operate in isolation. As long as liquidity does not dry up, there is no point in raising interest rates,” Mr. Kamath said.
He said the bank was in the process of acquiring 63 per cent stake in JSC Dana Bank of Kazakhstan and had obtained the RBI's consent. The decision to acquire stake in Dana Bank was made after an exhaustive study had concluded that presence in Kazakhstan would help in the bank's expansion in Russian countries.
Punjab National Bank had initiated steps to raise dollar debt to the tune of $100 million with a greenshoe option and it was likely to be concluded by the end of this month.
It was pursuing a proposal to open a branch in Canada and a representative office in Australia for which licence had been obtained.
On the expansion plans, he said the bank was likely to open more branches across the country during the current fiscal and it had initiated steps to recruit personnel in different capacities to man these branches.
