Public sector lender, Bank of India (BoI), is considering a hike in its Benchmark Prime Lending Rate (BPLR) following the Reserve Bank upping its key rates earlier this week.
The bank's Asset-Liability Committee (ALCO) would meet within the next 10 days to take a decision on its BPLR, BoI's Chairman and Managing Director, T S Narayanasami, told reporters here today.
Narayanasami also said that there could be a marginal increase in the bank's deposit rates as well.
He, however, did not specify the quantum of hikes, saying the decision would be taken at the bank's ALCO meet.
A lending rate hike would likely not be across the board, Narayanasami said.
With the banking system facing an upward pressure on interest rates, the chances of delinquencies were higher, especially in the retail segment, he said, adding that some borrowers might not repay their loans.
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The BoI Chairman said that with declining oil prices and an expected good monsoon, interest rates were likely to soften in the longer-term.
On the subject of reducing Government holding in public sector banks, the BoI Chairman who is also the present chief of the Indian Banks' Association (IBA), said that this had to happen as a part of the economic reforms process.
When asked whether the IBA had submitted any representation on the issue to the Government, Narayanasami said, "The IBA will be looking at this."