PNB cut in interest rates will depend on inflation

K C Chakrabarty, Chairman of state-owned Punjab National Bank informed that bank may consider on cutting its interest rates further in case inflation continues to fall.

He stated, “Last week, PNB cut its benchmark prime lending rate by 50 basis points to 11.5 per cent, which is the lowest among public sector banks”.

Inflation is indicating lower signals moreover the Reserve Bank of India monetary easing policy, will in turn make possible for banks to cut lending rates.

At present India’s headline inflation rate is a little over 5 per cent from a 13-year high of 12.91 per cent earlier in August. This moderating trend has impelled the RBI to cut its key policy rates.

Ever since October, the central bank has cut Repo Rate by 350 bps, Reverse Repo 200 bps and Cash Reserve Ratio 400 bps with an aim to boost liquidity and lift demand in the drooping economy.

Chakrabarty informed at present the bank has no plan to match State Bank of India’s special home loan scheme, in which it has put a freeze on the interest rate on new loans taken till April 30 at 8 per cent for one year.

PNB branch office inaugurated in Britain’s ‘Little India’

The Punjab National Bank (PNB) opened a branch at Leicester in Britain where a large section of people of Indian origin are staying.

The branch was inaugurated this week in the Belgrave Commercial Centre, in the heart of what is called the Golden Mile - the heart of Asians business and culture. It is also popularly known as 'Little India'.

The branch was inaugurated by the Indian-origin Lord Mayor of Leicester, Councillor Manjula Sood. The branch at present has five staff members. A tradition Hindu religious ceremony was performed at the opening of the branch.

Kamalesh Chakravarty, PNB chairman and managing director, remarked the bank hopes to attract 25 million pounds in deposits in its first year. Chakravarty pointed out, "We are looking at the long term. The credit crunch has had an effect in India but not on the scale seen in other parts of the world."

Earlier he had stated that the bank expects to make a profit of 4 to 5 million pounds in the current financial year. The bank started its operations in Britain in May 2007 aims to open new branches in Birmingham, Manchester, Wolverhampton and London. Already it is having branches in Southall and the City of London.

The bank got support in its move to Leicester by Invest Leicestershire and the East Midlands India Business Bureau.

The Punjab National Bank International is a subsidiary of the Punjab National Bank. Chakravarty informed bank has 4,600 branches in India and 38 million customers; therefore PNB aims to make a profit of 500 million dollars this year.