On Thursday public sector lender Punjab National Bank announced that by the end of this month it will take decision on revising the interest rates in the wake of hike in the short-term lending rate by quarter percent by the Reserve Bank.
Punjab National Bank Chairman and Managing Director K C Chakrabarty told reporters "We will take a call on increasing deposit and lending rates by the end of this month. Our ALCO (Asset Liability Committee) would examine".
On June 11 RBI had raised the repo rate by 0.25 per cent to 8 per cent in view of this some of the banks have raised both the deposit and lending rates.
Although the country's largest lender SBI at present has decided against upward revision of the interest rate.
Yesterday, Bangalore-based public sector lender Vijaya Bank announced the hike in deposit rates by 0.3 per cent to 8.8 per cent for maturity between 1-2 years.
Bank of Baroda is also expected to review the interest rates during the month.
During the week, private sector lender Yes Bank has also increased its Prime Lending Rate by 0.5 per cent to 16 per cent and the deposit rates by same percentage points.
Previously the bank had increased its fixed deposit rate to 9.5 per cent against 9 per cent while for senior citizens it was raised to 10 per cent compared to 9.5 per cent earlier.
Last week another private sector lender, Jammu & Kashmir Bank revised its PLR by 1 per cent to 14 per cent last week.
Friday, June 20, 2008
Wednesday, June 11, 2008
PNB signs MoU with IL&FS Cluster Development Initiative to finance manufacturing activities
Punjab National Bank (PNB) signed a MoU with IL&FS Cluster Development Initiative; with this the bank will be actively involving with financing of manufacturing activities. Under this agreement bank will be providing finance for industrial infrastructure projects in the country.
However the growth in the manufacturing sector has dipped to 3% in March 2008 as compared to a 16% increase a year ago. Meanwhile bank has ruled out revising deposit rates upwards in the immediate future, triggered by concerns on rising inflation.
According to statement released by the bank, the bank’s SME portfolio was at Rs 18,198 crore. There is no margin money requirement for loans up to Rs 2 lakh under SME advances. The bank is giving loans up to Rs 50 lakh to micro and small enterprises without third-party collateral security under the credit guarantee scheme.
Punjab National Bank chairman KC Chakrabarty pointed out that under the MoU, the bank will be financing the various industrial infrastructure projects covering various manufacturing sectors. These projects include common infrastructure facilities like effluent treatment plants, hazardous waste disposal, water supply, green field industrial parks, up gradation of existing industrial estates, quality control labs, design centers etc.
He told bank will be allocating an estimated Rs 2,500 crore for such projects. These projects are expected to open up around 1,00,000 jobs over the next five years. Besides financing the common facilities or industrial park infrastructure, the bank will also be financing the various SME units coming up in these industrial parks for their various credit needs.
The term loans for fixed assets will also be provided, apart from the working capital loans for their operational needs. Bank will be taking up all the financial responsibility of the various industrial units. About 45% of the total contribution to manufacturing comes from small and medium units. The cluster development initiative of IL&FS is a group company of IL&FS and has been created to meet the various needs of the industrial clusters.
Under the MoU, the company will be responsible for sourcing of the projects, project structuring, project development, engineering & procurement, project management and supervision, due diligence and project monitoring. Although bank deposits are getting eroded with rising inflation, Punjab National Bank on Tuesday said that there is no immediate plan to increase deposit rates.
Recently the country’s largest bank, SBI, had raised deposit rates effective this month. “Inflation is higher. There would be pressure on interest rates. At present, there is no plan to increase deposit rates,” Mr Chakrabarty said. Position on interest rates appear to be stable, he said, in fact the interest rates are still higher than the inflation and there is incentive for depositors.
By the end of the week May 24, inflation stood at 8.24%, making earnings from one-year deposits to be negative. The return on fixed deposits having tenure with less than one year, earn a rate of less than 7%. However some pressure is showing up on the margin because of increase in cash reserve ratio (CRR), the percentage of deposits which commercial banks have to keep with the Reserve Bank of India. It is being expected that there are less chances of another hike in CRR.
In April, RBI had hiked CRR by 0.75% to suck out around Rs 27,000 crore from the economy to cool down inflation. Earlier this week, ICICI Bank CEO KV Kamath stated liquidity is good and there is no signs of any rate hike. “As of now, there is no signaling of interest rate hike,” he had said.
However the growth in the manufacturing sector has dipped to 3% in March 2008 as compared to a 16% increase a year ago. Meanwhile bank has ruled out revising deposit rates upwards in the immediate future, triggered by concerns on rising inflation.
According to statement released by the bank, the bank’s SME portfolio was at Rs 18,198 crore. There is no margin money requirement for loans up to Rs 2 lakh under SME advances. The bank is giving loans up to Rs 50 lakh to micro and small enterprises without third-party collateral security under the credit guarantee scheme.
Punjab National Bank chairman KC Chakrabarty pointed out that under the MoU, the bank will be financing the various industrial infrastructure projects covering various manufacturing sectors. These projects include common infrastructure facilities like effluent treatment plants, hazardous waste disposal, water supply, green field industrial parks, up gradation of existing industrial estates, quality control labs, design centers etc.
He told bank will be allocating an estimated Rs 2,500 crore for such projects. These projects are expected to open up around 1,00,000 jobs over the next five years. Besides financing the common facilities or industrial park infrastructure, the bank will also be financing the various SME units coming up in these industrial parks for their various credit needs.
The term loans for fixed assets will also be provided, apart from the working capital loans for their operational needs. Bank will be taking up all the financial responsibility of the various industrial units. About 45% of the total contribution to manufacturing comes from small and medium units. The cluster development initiative of IL&FS is a group company of IL&FS and has been created to meet the various needs of the industrial clusters.
Under the MoU, the company will be responsible for sourcing of the projects, project structuring, project development, engineering & procurement, project management and supervision, due diligence and project monitoring. Although bank deposits are getting eroded with rising inflation, Punjab National Bank on Tuesday said that there is no immediate plan to increase deposit rates.
Recently the country’s largest bank, SBI, had raised deposit rates effective this month. “Inflation is higher. There would be pressure on interest rates. At present, there is no plan to increase deposit rates,” Mr Chakrabarty said. Position on interest rates appear to be stable, he said, in fact the interest rates are still higher than the inflation and there is incentive for depositors.
By the end of the week May 24, inflation stood at 8.24%, making earnings from one-year deposits to be negative. The return on fixed deposits having tenure with less than one year, earn a rate of less than 7%. However some pressure is showing up on the margin because of increase in cash reserve ratio (CRR), the percentage of deposits which commercial banks have to keep with the Reserve Bank of India. It is being expected that there are less chances of another hike in CRR.
In April, RBI had hiked CRR by 0.75% to suck out around Rs 27,000 crore from the economy to cool down inflation. Earlier this week, ICICI Bank CEO KV Kamath stated liquidity is good and there is no signs of any rate hike. “As of now, there is no signaling of interest rate hike,” he had said.
PNB to setup new overseas branches
A senior official of the State-run Punjab National Bank informed that bank will be opening its new branches in Shanghai and Norway, set up a subsidiary in Canada and a representative office in Singapore this fiscal.
Executive Director J.M. Garg told reporters on the sidelines of an industry conference that the bank has also signed a preliminary joint venture agreement with a private partner for the setting up of a bank in Bhutan where the Indian bank will hold a majority stake.
He informed the bank will be up grading its representative office in Dubai into a offshore banking unit to conduct institutional banking operations.
Currently bank branches are operating in Hong Kong, a subsidiary in London and a small operation in Kabul, which together generate a business of $300 million, he said.
Executive Director J.M. Garg told reporters on the sidelines of an industry conference that the bank has also signed a preliminary joint venture agreement with a private partner for the setting up of a bank in Bhutan where the Indian bank will hold a majority stake.
He informed the bank will be up grading its representative office in Dubai into a offshore banking unit to conduct institutional banking operations.
Currently bank branches are operating in Hong Kong, a subsidiary in London and a small operation in Kabul, which together generate a business of $300 million, he said.
PNB to launch credit card business in second-half of this fiscal
State-owned Punjab National Bank (PNB) will be launching its credit card business in the second-half of this fiscal year. A top bank official informed that bank is likely to launch its credit card business in the second-half of this fiscal and will be signing an agreement with Visa or Mastercard for the venture.
J M Garg told reporters on the sidelines of a seminar, "We expect the credit card business to get operational in a period of six months and would tie-up with Visa or Mastercard for the business. We have finalized the business strategy for the proposed card business, PNBs Executive Director."
Garg told PNB is in talks with a few potential players for its subsidiary as the bank has plans to part from around 26 per cent stake in its subsidiary, PNB Gilts, sometime this fiscal.
Bank is looking at a better pricing for the deal and is having talks with a few players. He said I expect to close the deal sometime in the present fiscal when market conditions are conducive for that (the deal).
Speaking about its overseas operations, Garg said that the bank will be setting up a subsidiary in Canada and a representative office in Singapore apart from up gradation of its existing representative office in Dubai.
J M Garg told reporters on the sidelines of a seminar, "We expect the credit card business to get operational in a period of six months and would tie-up with Visa or Mastercard for the business. We have finalized the business strategy for the proposed card business, PNBs Executive Director."
Garg told PNB is in talks with a few potential players for its subsidiary as the bank has plans to part from around 26 per cent stake in its subsidiary, PNB Gilts, sometime this fiscal.
Bank is looking at a better pricing for the deal and is having talks with a few players. He said I expect to close the deal sometime in the present fiscal when market conditions are conducive for that (the deal).
Speaking about its overseas operations, Garg said that the bank will be setting up a subsidiary in Canada and a representative office in Singapore apart from up gradation of its existing representative office in Dubai.
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