New Delhi: Corporation Bank said that it would cut deposit rates by 50 basis points across all maturities beginning next month.

“We have decided to slash term deposit rates by 0.5%,” the newly appointed Chairman and Managing Director of Corporation Bank J M Garg said.

“Following the reduction, the peak rate would come down to 10%,” he said.

The bank has already reduced the benchmark lending rate by 75 basis points beginning this week. The Prime Lending Rate of the bank has been revised downwards to 13.25% from earlier level of 14%.

Talking about the credit expansion, Garg said that the advances are likely to witness a growth rate of 22%. However, loan growth in the first half was 25%.

“The total business of the bank is expected to increase to Rs1,15,000 crore by the end of March 2009,” he said.

At the end of September 2008, the total business of the bank stood at about Rs1,05,000 crore.

“At the same time deposits are expected to increase by 18%,” he said, adding: “The bank’s focus going forward would on increasing its CASA (Current Account Savings Account) base.”

“The bank intends to raise its CASA to 30% of the total deposits by the end of March 2009 from the current level of 26%,” he said.

“The increase in low-cost deposits would also help the bank in increasing its Net Interest Margin (NIM),” he said.

“Although the NIM is 2.43% at the end of the first half, the bank aims to take this to at least 2.75% by the end of the current fiscal,” he added.

On branch expansion, Garg said that the bank would be opening 45-50 branches in the next four months with its focus on the Northern and Western regions.