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Indian small banks wait as larger ones cut rates

Indian small banks wait as larger ones cut rates
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First Published: Thu, Feb 21 2008. 01 11 PM IST
Updated: Thu, Feb 21 2008. 01 11 PM IST
Mumbai: Small and medium Indian banks prefer to wait and watch before revising lending rates, even as some of their bigger peers reduced rates in the last few days, top bank officials said on Thursday.
“The bigger ones have done it, but others have not done it yet,” said Prakash P Mallya, chairman and managing director of the state-run Vijaya Bank, adding it would take a view after some of the medium sized banks revise their rates.
On Wednesday four state-run banks, including the country’s biggest lender, State Bank of India (SBI), revised their prime lending rates.
SBI and Canara Bank cut rates by 25 basis points each, while Bank of India and Union Bank of India cut rates by 50 basis points each.
“We have not taken any decision as yet,” said V.Santhana Raman, executive director, Bank of Baroda , saying even some bigger banks such as Punjab National Bank are yet to decide on the revision of rates.
Private lender Karnataka Bank plans to keep all rates unchanged for some more days, Chairman Ananthakrishna said.
“We will wait and watch,” he said, adding it could review the rates in the first half of next month.
“We will take a decision in a week’s time, maybe after the budget,” said M. Venugopalan, chairman and CEO, Federal Bank.
He also said there is not much liquidity available, though he ackowleged the rates are high after factoring in the deposit costs.
“We cant be out of the market, we will be in line with the market,” he said when asked whether there can be a rate cut.
“Our rates (PLR) are already competitive and there is no question of reducing it,” said M.S. Sundara Rajan, chairman of Indian Bank.
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First Published: Thu, Feb 21 2008. 01 11 PM IST
More Topics: Banks | Rates | Lending | SBI | Canara |