The credit growth is slow despite signs of an economic recovery. Why is that?
Credit growth has dropped to about 13.5 per cent in the current fiscal due to delay in several infrastructure projects and lower demand from oil companies. However, we expect it to pick up in the next few months and anything between 18 and 20 per cent should be a satisfactory growth rate. For Corporation Bank it is at 22 per cent and we expected that to improve in the coming months.
How has the deposit growth been?
Corporation Bank has registered a deposit growth of about 29 per cent. It has been considerably high. Individual investors are still not participating in the stock market like few years ago. The banking industry has witnessed a deposit growth rate of over 20 per cent.
What would be the impact of late rainfall?
Yes, delayed monsoon is a cause for concern. But the late rains have helped in filling up the reservoirs. The kharif crop, however, has been damaged which could push up food prices. The government of course is taking steps to ensure that things are under control. We are expecting a good Rabi season and the delayed rains would help in having a good Rabi.
The Reserve Bank of India has indicated that interest rates could firm up in the near future. What is your view?
Interest rates are likely to remain stable for the next three to four months. We will review the situation in January-February, and seeing the inflation figures then, we will take a call.
What’s your prime lending rate?
We have a PLR of 12 per cent. We have seen demand picking up for retail credit, especially housing and automobiles. A chunk of business from foreign and private sector banks is also getting channelised towards PSU banks.
Are you planning to raise capital from the market?
No, Corporation Bank's capital adequacy ratio is 16.5 per cent which means that we are fully prepared for credit expansion in the future.