A day after RBI surprised the street expectations by cutting the repo rate by 50 basis points (bps), many banks started to reflect the same by cutting their base rates.With a 25 bps cut, UCO Bank Wednesday became one among the few banks who have cut their base rates.The bank’s current base rate is at 9.70 percent and with this move, the credit growth is likely to pick up going forward, Charan Singh, ED, UCO Bank, tells CNBC-TV18.The bank has a large portion of corporate credit, which has gone negative, he adds.Other than UCO Bank, State Bank of India, Axis Bank, Bank of India, Andhra Bank and State Bank Of Travancore have also cut their base rates.Below is the transcript of Charan Singh’s interview with CNBC-TV18\\'s Reema Tendulkar and Nigel D'Souza.Nigel: 25 bps is what you have cut but yesterday we saw already a 50 bps cut. Do you believe that there is scope for more going ahead?A: Yes, we will see in the next quarter again and we will examine all the factors like credit pick up and all those things and of course how the market responds to this 50 bps cut in the policy rate. So, accordingly we will take a view in the next Asset-Liability Committee (ALCO) in the next quarter and then we can further cut but at this moment we have cut by 25 bps and we cut 25 bps in May also. So, 50 bps we have reduced in total in this 2015. Reema: But with this base rate cut what would be the impact on your Net Interest Margin (NIM)?
A: We have to just calculate but I am not sure at this moment I am not sure NIM will be affected by what magnitude.
Reema: But it will be affected?
A: Yes, certainly.
Nigel: Could you tell us what exactly is credit growth currently and what are your targets going ahead as well? Do you see it picking up?
A: This current year the credit growth is very subdued. In fact it is almost flat or it is going in the negative territory in fact but we are trying. In the second half - after reducing this base rate also, we think the credit will pick up and we are trying very hard. In fact we were having large portfolio of corporate credit and because of that this credit growth has not been there this year. It is in the negative territory at the moment. So, let us hope that this will increase after this base rate cut. The second half generally is better for credit growth.
Reema: Right now in the first six months of this fiscal year your credit growth would be negative by how much?
A: Maybe almost at flat level or a little bit negative but almost flat we are expecting.
Nigel: Also in terms of your asset quality last quarter around we saw it worsen a tad bit. Going ahead do you expect any kind of improvement?
A: Maybe at the same level this time again.
Nigel: So, we will not see any improvement, we will not see any worsening as well?
A: No, not at this moment at least.
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