The country's second largest government-owned commercial bank, Punjab
National Bank (PNB) reduced the interest rates on various non-resident
schemes. FCNR (B) Scheme's interest rates for dollar deposits with maturity
tenure between one and two years have been reduced from 2.50 per cent
to 2.46 percent. The rates for dollar deposits with maturity period
between 2-3 years, 3-4 years and 4-5 years have also been slashed down.
For maturity between 2-3 years rate is 2.56 per cent while for 3-4 years
and 4-5 years the rates are 2.88 per cent and 3.10 per cent respectively.
deposit scheme interest rate has been reduced to 3.21 per cent for 1-2
year deposits. Those with a maturity of 3-5 years will yield an interest
rate of 3.63 per cent.
Presently the bank is offering credit cards, auto loans, home loans,
personal loans, fixed deposits, saving account and education loan to
its customers and is unlikely to raise interest rates for the next 5-6
months even if the central bank raises its key lending rate. The bank
chief, K.C. Chakravorthy, said an increase of 50 basis points in CRR
or an increase of 25 basis points in the repo rate would not affect
the bank's margin by more than 10-15 basis points. The bank expects
to achieve its net income targeted growth by keeping its interest rates
constant except for non-resident schemes. Mr. Harpreet Singh, Business
Director (Wealth Management, Distribution and Loans), Centurion Bank
of Punjab, agreed that there has been a slowdown in FCNR deposits in
the last few months. "The interest rate differential is not much
as the RBI policy does not encourage very high rates. In our experience
lot of NRI (Non Resident
Indian) customers have diverted funds into real estate, though not much
to equity," he said.