State-lender Indian Overseas Bank (IOB) may again be forced to increase lending rates if inflation continues to hover around double digits, a top official said here today.
When asked about IOB recently hiking lending rates on loans to 8.5 per cent from 8 per cent, Nupur Mitra, executive director, IOB, said the bank has to manage both its finances and its customers.
If the inflation continues to hover around the double digit level, the interest rate is bound to increase to rein in the impact, she told reporters.
Mitra said IOB expects to sustain a 23 to 24 per cent growth during the current fiscal, but has to contend with a mismatch between deposits and advances which were to the tune of 18 per cent and 22 per cent, respectively.
Mitra also justified the fixing of 24 per cent interest rate for Microfinance Institutions (MFIs), saying it would help wean away the villagers and farmers from the "greedy money lenders."
"We cannot wipe them (MFIs) out, since bankers alone would not be able to cover the villages and bring them to mainstream banking. Since the interest rates are regulated there would not be any problem in lending to MFIs," she said.
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Mitra said the bank, in its 75th year of inception, has identified 75 villages across the country and launched IOB Sampoorna and IOB Smile, as part of its Corporate Social Responsibility.
She said the schemes aimed at the holistic development of the selected villages by taking up various activities, such as laying roads and setting up medical facilities, in coordination with the stake holders in the development of the respective regions.
All the eligible residents are provided with a No Frills Savings Account in the bank, biometric cards and an overdraft of Rs 1,000 if requested by the beneficiary, she said.
Nupur handed over authorisation to 10 beneficiaries to undergo Endoscopy and Biopsy tests at a local hospital.