SENSEX NIFTY
Aug 28, 2013, 05.32 PM IST | Source: CNBC-TV18

Not hiking base rates; deposit growth key: Bank of India

VR Iyer of Bank of India says that currently there is no need to increase the base rates as its liquidity position is 'fairly comfortable'. She told CNBC-TV18 that deposit growth in the times to come will decide whether to increase deposit rates, which will result in hiking base rates too.

We will be able to contain NPAs at the level as it was in the previous quarters and on the restructuring book side.

VR Iyer

CMD

BoI

At a time when other banks have been hiking their base rates, Bank of India says there is no need to do so. VR Iyer, CMD of Bank of India says that the bank’s liquidity position is comfortable and has no requirement to borrow in the marginal standing facility (MSF).

However, she adds a case for a base rate hike may arise on account of fall in deposit growth. The bank's deposit growth has been lesser than Q1 and if the need arises to increase deposit rates "we will look to hike base rates then," she told CNBC-TV18. The bank is also confident of containing the non performing assets (NPAs) to Rs 1,000-1,100 crore.

Also read: Yields will be under stress over rupee instability: HDFC Bk

Below is the edited transcript of her interview to CNBC-TV18.

Q: Your peers have raised the base rates but you have not. Any plans of doing that?

A: As of now, we are not thinking of increasing the base rate. We are examining the pros and cons of it. Maybe, we will look into the matter shortly. But there is no immediate need for the same.

Q: If yields stay at these levels, do you see a case of base rate hike? How much yields would have to go up? By when will you be able to take a decision on this rates?

A: The bank's liquidity position is fairly comfortable. We do not have any high liquidity mismatches. We also are not feeling the need to borrow in the marginal standing facility (MSF). The deposit growth was pretty decent in Q1. We have good deposits for that matter.

I do agree that we will not be able to continue this way as in the current quarter’s deposit growth, has not been to the level as it was in the Q1. So, maybe within a week or ten days, we will revisit that. Whether there is a case for us to increase the rate of interest from the deposits, we will also relook at the base rate increase.

Bank of India stock price

On July 23, 2014, Bank Of India closed at Rs 287.20, up Rs 2.25, or 0.79 percent. The 52-week high of the share was Rs 356.75 and the 52-week low was Rs 126.95.


The company's trailing 12-month (TTM) EPS was at Rs 42.45 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 6.77. The latest book value of the company is Rs 465.37 per share. At current value, the price-to-book value of the company is 0.62.

1 2
Set email alert for

ADS BY GOOGLE

video of the day

See 8000 Nifty by Dec, bullish energy, cap goods: Religare

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.