Canara Bank on Monday said it has
no plans to raise base rate at least for now.
"Our base rate is lowest among PSU banks at 9.95 per cent... There is no programme to raise it as of now," Canara Bank Chairman and Managing Director R K Dubey said at the Ficci organised 10th Banking Conclave when asked about the possibility of a rate hike.
"We are working on margins. We will be possibly the last one to do so if at all needed. If at all there is increase I do not think it will be like 25 basis points," he said.
"The rise in rate in the bond market and additional provisioning for restructuring of loans will have some impact on margins," Dubey said.
The net interest margin was at 2.2 per cent in the first quarter of FY14.
Dubey, however, did not quantify the possible combined impact of depreciation on account of bond portfolio and additional provisioning for restructured loans.
Dubey said
banks needed to think out of the box to protect assets from slipping into NPA with greater hand-holding with stakeholders.
"At Canara Bank we are rescheduling education loans like offering progressive payout. With such efforts we hope to bring down our education NPA below Rs 100 crore by March," he said.
Dubey said the gross NPA of the bank was under 3 per cent and it was aimed to maintain it despite apprehension of fresh slippage.
The bank has lined up restructuring of accounts of Rs 3,000-4,000 crore to prevent them from turning NPA.
Dubey remained optimistic about economic revival by the third or fourth quarter period of the year.
Canara Bank had sought Rs 1,000 crore capital from the government for overseas expansion.
Dubey said the bank was planning to have presence in Johannesburg, Frankfurt, Dubai, Tokyo, New York, New Zealand, Singapore and Brazil.
The bank currently has five branches at locations in London, Hong Kong, Shangai and Bahrain.
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