Public sector lender Bank of Baroda does not see any pressure on increasing deposit rates in the near and improvement in liquidity and its ability to raise funds from alternate avenue. Its MD & CEO, Debadatta Chand, MD & CEO told Sachin Kumar that the bank wants to increase the share of retail, Agriculture, MSME loans to 65% in three to five years from current 58%.
Also Read– 8th Pay Commission Important Update: Centre likely to issue clarity on next pay commission by
Edited Excerpts:
Q- Will Bank of Baroda hike deposit rates amid increasing competition to mobilise funds?
Ans: The liquidity scenario in the system has improved since June onwards and the Reserve Bank of India has also changed the stance. As we are getting into busy season, a lot of cash would get back into the system. In that scenario, we are also expecting a higher growth in deposit. Also due to our ability to raise funds from alternate sources, there will not be much pressure on us to raise deposit rates further from here onwards.
Q- Do you aim to increase share of retail loans?
Ans- We aim to increase share of RAM segment (Retail, Agriculture, MSME) in the next few years. The share of RAM segment was at 58.2% as of March 2024. Our aspiration is to take it 65% but in three years to five years. we want to grow on the RAM as we want to be a much more diversified .
Read More:-Home Loan Festive Offers: Key things to keep in mind before taking a loan
Q- With interest rate likely to reverse soon, what impact it will have on bank’s Net Interest Margin (NIM)?
Ans – We have kept the NIM guidance the same at 3.15% plus minus 5 bps. In the second quarter it at 3.10% compared to 3.07%.
We are quite hopeful that possibly later in the third quarter or fourth quarter because of the improvement in global liquidity and rate stance change, there will be some moderation that should happen on the cost of deposit. We are hopeful, at this point of time, to maintain the full year NIM at 3.15 plus minus five bps.
Read More: Monthly outflow of FIIs cross Rs 1 lakh crore for the first time, DII inflows touch Rs 97,000 crore
Q -Bank’s GNPA has come down to 2.5%, is there further scope to bring it down?
Ans- We do not give guidance on GNPAs but will keep making efforts to bring it downward. Our recovery target is Rs 12,000 crore and my slippage containment would be somewhere close to Rs 9,000 to 10,000 crore, so that gives me a delta of Rs 3000 crore. In that scenario, incrementally, the GNPA and net NPA will go down. We expect to surpass this recovery target.
We have to contain the fress slippages. This quarter the fresh slippages have been 2700 crores, and last quarter it was almost the same level of 2700 crore. On a full year basis, I want this slippage to be less than 10,000 crore, which will have positive impact on the GNPA.
For more news like this visit Officenewz.com
