(Photo: Pradeep Gaur/Mint)
(Photo: Pradeep Gaur/Mint)

Central Bank of India looking at fund raising over next 2 months

  • RBI Governor had said on Monday that the central bank is considering asking banks to link repo rate to an external benchmark
  • The bank will introduce few retail products whose interest rates will be linked to an external benchmark within a month

Mumbai: Central Bank of India, managing director and chief executive officer Pallav Mohapatra on Monday said that the bank is looking to raise 2,000 crore from the market over the next two months. speaking on the sidelines of the banking summit organised by the Federation of Indian Chambers of Commerce and Industry and Indian Banks Association, Mohapatra said that the funds will be raised over and above the government infusion, via rights issue or follow-on-public offer.

Mohapatra also said that the bank will introduce few retail products whose interest rates will be linked to an external benchmark within a month.

"We will (link few retail loan products to external benchmark), a lot of changes have to be done on the IT (Information technology) side so we will gradually move to (other products) as well," he said, adding that the bank will monitor the performance of such loans till September and later expand the bouquet of external benchmark linked loan products.

Following the Reserve Bank of India's Monetary policy on 5 July, several banks including SBI has linked few retail loan products with the repo rate, in an effort to comply with RBI's push for faster transmission of rate cuts.

RBI Governor Shaktikanta Das had said on Monday that the central bank is considering asking banks to link repo rate to an external benchmark. "We are constantly engaged with the banks with regard to faster and greater transmission of monetary policy rates so that is a continuing process...and I expect more initiatives and this process to become faster. A time will come when we perhaps move to a formalised arrangement," RBI Governor Shaktikanta Das said.

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