PNB says savings rate hike to hit NIM
By Neelima Shankar
May 12, 2011
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Public sector lender, Punjab National Bank has said that the recent hike in savings bank rate would bring it some affect on its net interest margin (NIM), if not much but by 15%.

"Definitely, one third of our total deposits are savings...0.5% hike in saving interest rate will make an impact of 15 bps on NIM," PNB Executive Director Mohan V Tanksale said.

As on 2010-11, the NIM of the bank figured to 3.96%.

He also said that rise in savings bank rates has also benefitted in maintaining CASA levels.

"We have raised our base rate from 9% to 9.5%, while BPLR rate has been increased from 13 to 13.5%," he said.

"Ultimately when rate of interest goes up, the cost of borrowing for borrowers also goes up and borrowers will have to pay more," he said.

"If we go by an average growth of 20%, our total business should grow by over Rs 100,000 crore in current fiscal," he said.


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