Mumbai: Private sector banks are in no hurry in emulating their public sector peers when it comes to paring interest rates. On Wednesday, large public sector banks led by the country’s largest lender State Bank of India (SBI) cut lending rates, following the suggestion of finance minister P. Chidambaram. While SBI and Canara Bank cut their rates twice by 25 basis points each, Bank of India and Union Bank decided to go with a sharp 50 basis points cut at one go.
But private sector banks have decided to “wait and watch” till the current fiscal year ends in March as they feel lending rate cut alone will not make sense unless they cut their deposit rates too, a step they are not willing to undertake at this point.
“We will not be able to maintain our margins if we only bring down the lending rates and leave deposit rates untouched,” said Rajat Monga, chief financial officer at Yes Bank Ltd, a new age private sector. Currently the prime lending rates of private banks range between 13% and 15% and they offer 9-10% on one-year deposits.
The consensus among private banks seems to be that March being a “difficult month” due to outflows on account of advance tax payments, a decision on rate revision will be taken as the new fiscal year begins in April.
Corporations pay corporate tax every quarter and around Rs50,000 crore worth of liquidity is likely to flow out of the financial system in March, creating temporary tightness.
Vivek Vig, country head of retail operations for Centurion Bank of Punjab Ltd, said his bank has not decided yet on a rate revision. Officials at Kotak Mahindra Bank Ltd and IndusInd Bank Ltd also said their banks have not decided on a rate revision yet. Another banker with a private mid-sized bank headquartered in Mumbai said SBI can afford to lend cheap without touching its deposit rates for a month but will eventually have to cut deposit rates. Some public sector banks, in fact, are cutting their deposit rates along with lending rates.
Mumbai-based Union Bank is one of them. Apart from the large public sector banks, relatively smaller banks such as Syndicate Bank, Bank of Maharashtra and Kolkata-based United Bank of India too have reduced their lending rates by 0.25% each.
David Malone named new IDRC president
New Delhi: Canada’s minister of foreign affairs Maxime Bernier on Thursday named Canadian high commissioner to India David M. Malone as president of the International Development Research Centre (IDRC). Malone will assume his new position from 1 July. He replaces Maureen O’Neil.
“Malone is an accomplished diplomat and respected scholar,” said Bernier. “His immense experience in the field, as well as in academic research covers areas such as international economic trends, conflict prevention and human rights. He will be a great asset to the centre.”
Malone joined the department of external affairs in 1975 and has served in Ottawa, Cairo, Amman and New York. He is also non-resident ambassador to Bhutan and Nepal.
“I will be tremendously sorry to leave India, an assignment I have loved,” Malone said, adding, “But I am delighted to be offered the opportunity to work with the very impressive IDRC board and staff on a broad range of issues highly relevant to India and on which India’s leadership will be of systemic importance to development efforts in the rest of the world.” Staff Writer
MS Corp launches online advertising platform
Mumbai: The world’s largest software firm Microsoft Corp launched Digital Advertising Solutions, an online and mobile advertising platform here on Thursday along with NDTV Media Ltd, its India sales partner. The company has partnered with third party publishers such as HDFC Securities and Facebook.com for the service.
India is the first market outside the US where the company has deployed the platform, which was launched early last year after the $6 billion (Rs24,060 crore)acquisition of ad network aQuantive, Inc. Namitha Jagadeesh