Allahabad Bank hikes PLR and deposit rate by 0.5 pc

Allahabad Bank hikes PLR and deposit rate by 0.5 pc
30 Jun, 2008, 1456 hrs IST, PTI

NEW DELHI: Public sector lender Allahabad Bank on Monday decided to increase its benchmark prime lending rate by 0.5 per cent to 13.50 per cent, effective from Tuesday.

The bank also raised its term deposit rates by 50 basis points for various maturities, in a bid to maintain its net interest margin.

The maximum interest rate on term deposit will be 9.5 per cent for a period of one to three years, the bank said in a release.

“For senior citizens, the rate of interest for the same period would be 10 per cent,” it added.
The lending rate revision will lead to increase in PLR- related lendings like floating home loan, corporate loan, car loan etc.

Allahabad Bank’s announcement came after major public sector lenders SBI and PNB raised their BPLRs by 0.5 per cent to 12.75 per cent and 13 per cent, respectively.

Similarly, Bank of Baroda and Bangalore-based Canara Bank also hiked its BPLR by 0.5 per cent to 13.25 per cent.

Last week, major banks like SBI, PNB had also hiked the deposit rate by up to 50 basis points for various maturities.

The rate hike comes in the wake of RBI increasing its short-term lending rate and the mandatory level of deposit banks are required to keep with the central bank, by 50 basis points each to contain inflation.
Shares of Allahabad Bank were trading at Rs 56.45, down 1.91 per cent on the BSE.

Delay in Bank CMDs’ appointments affecting operations: Bankers

Delay in Bank CMDs’ appointments affecting operations: Bankers
30 Jun, 2008, 1743 hrs IST, PTI

NEW DELHI: Delay in filling up of CMD posts falling vacant due to retirements in certain public sector banks is affecting key decisions, especially on interest rates, bankers have said.

Banking industry sources said the post of CMD in Syndicate Bank is lying vacant for some time and the top slot in certain public sector banks such as Vijaya Bank and Andhra Bank would fall vacant in a month’s time, but government has yet to make an announcement about new appointments.

“Banking industry is going through a critical phase and the going is becoming more and more tough nowadays with interest rates moving northward. At this stage, it may not be fruitful to keep the top posts vacant as this delays the decision making process of individual banks,” said senior official in a public sector bank.

Unlike in the past, process of appointments has been delayed leading to uncertainty in banks, which have to take decisions on interest rate after hike in repo rate and CRR by the Reserve Bank last week.

However, Allahabad Bank Chairman and Managing Director A C Mahajan is set to join Canara Bank as its CEO. Its present CMD MBN Rao superannuates today.

While the CMDs of Vijaya Bank and Andhra Bank, P P Mallya and K Ramakrishna, will vacant their post after a month, the names of their successors are yet to be finalised, sources added.

“The process has become slow in the last few months and often the topmost post is unoccupied for days, which is not very good for PSU banks, especially considering the current banking scenario,” another senior PSU banker pointed out.