Allahabad Bank CMD, Mr. J.P.Dua has said that the Indian market is flush with liquidity and that the trend is all set to continue in future too. "The reverse repo levels have been hovering above Rs 20,000 crore, which shows there is ample liquidity for the borrowers," he said.Although some liquidity would be pumped out of the system as a result of advance tax payments, Mr. Dua said that the surplus would still be there.
Speaking on the base rate system to be implemented in July 2010, he said that the base rate for different banks will be in the range of 9 to 10%.
The base rate system has been directed as the new system of lending by RBI to be adopted by all banks is said to bring transparency in the system. It would remove the BPLR system of lending.
"There are issues, which are being ironed out by the banking regulator like whether the cost of funds will be decided on the basis of long term deposits, in which case the base rate will be higher and vice versa," he added.
The base rate would benefit the micro, small and medium enterprises (MSMEs). However the base rate has been questioned for many reasons. Implementation of base rate on home loans has been a major questionable issue since quite some time.
Mr. Dua had visited Lucknow to inaugurate the e payment facility of Uttar Pradesh commercial tax.
The bank has followed suit in this regard with banks like State Bank of India, Punjab National Bank and Bank of Baroda to start this facility.
Speaking on the bank's goals this year he said, "We will achieve full core banking solutions (CBS) status by December 2010."
Allahabad Bank has 2,285 branches pan India, and has RBI licenses to open another 68 branches.
"We have achieved 100 per cent growth in deposits and MSME lending growth stands at 68 per cent," he said.
Allahabad Bank also has 13 lead districts in UP in its kitty and has opened two farmers training centres at Rae Bareli and Banda.