PNB hikes deposit rates & PLR by 100 bps

After the Reserve Bank of India announcement of hike in the short-term inter-bank lending rates (repo rate) and mandatory cash reserve (CRR) by 0.50 per cent and 0.25 per cent, Punjab National Bank (PNB) has raised its benchmark prime lending rate (PLR) by 100 basis points to 14 per cent with effect from August 1.

PNB is country’s second-largest public sector bank by assets has also decided to hike its deposit rates by 75-100 basis points across various maturities to make them more competitive in the market. The deposit rate hike will also be applicable from August 1.

Dr K. C. Chakrabarty, PNB Chairman & MD, told reporters, “These decisions have been taken today looking at the extraordinary situation prevailing and to provide better returns to the depositors. Today the inflation rate is almost 12 per cent. We will not be able to induce the people to save unless we increase the deposit rates. We also hope to protect our net interest margin at 3.5 per cent”.