The Oriental Bank of Commerce (OBC) is likely to go in for a simultaneous cut in deposit and lending rates following the 50 basis points cut in the repo rate on Tuesday, its Chairman and Managing Director, Mr S. L. Bansal, has said.
Only last week, ahead of the Reserve Bank of India's credit policy, OBC had gone in for some reduction in base rate and deposit rates in certain maturities. The base rate was reduced by 10 basis points to 10.65 per cent.
“I am assuring you that our interest rates will further come down….When? You will have to wait,” Mr Bansal told
Terming the RBI's move to cut repo rate by 50 basis points as a “bold decision”, he said it “surprised” him. Mr Bansal said that the focus of the bank this year would be to improve the retail business. As part of this effort, OBC is opening more retail-focused branches. At present, it has a network of 1,750 branches and 1,250 ATMs.
Mr S. C. Sinha, Executive Director, later indicated that the quantum of reduction in deposit and advance rates could be between 25 and 50 basis points. “It would certainly be not less than 25 basis points”.
Meanwhile, Mr Bansal said that the bank would in 2012-13 aim at a net interest margin of 3 per cent. Several public sector banks, including OBC, had faced some stress on their balance-sheets in 2011-12, primarily due to the slowdown in the economy.
For 2012-13, OBC will target a deposit growth of 19 per cent and advances growth of 17 per cent, Mr Bansal said. The growth rates in deposits (including bulk deposits) and advance in 2011-12 was 24 per cent and 19 per cent, respectively.