Punjab National Bank, the country's second-biggest public sector lender, plans to cut exposure to personal loans, including home finance, to bridge the gap between higher credit offtake and lower deposits."The bank is concerned over widening gap between resource mobilisation and credit expansion and will soon take decisions on curtailing credit exposure by reducing personal loans," U S Bhargava, chief general manager, PNB, told PTI.The bank's asset liability committee (ALCO) will meet later this week to decide on the issue, he added.PNB's credit exposure is growing at 28% as against a growth of 20-22% in resource mobilisation.The bank had earlier indicated it could increase the Prime Lending Rate (PLR) by 25 to 50 basis points and interest rates on all types of personal loans, including housing loans.At present, PNB charges a PLR of 12.25% while the interest rate on personal loans is between 12-13%.A number of lenders such as ICICI Bank and HDFC Bank have already raised PLR by 100 basis points, while Bank of Baroda increased the rates by 75 basis points.The move followed Reserve Bank's decision to increase repurchase rate at which it lends to banks and the cash reserve ratio, the deposits to be kept by all banks with RBI, to check high credit growth and tame inflation in the economy.Bhargava said while loans for the first house of a borrower would be kept under priority area, PNB would take steps to discourage buying a second or third house.
