India’s second largest bank PNB today said it would soon take a call on revising interest rates in response to RBI's tight monetary stance. The lender also said it might raise Rs 2,000 crore in the bond market later this year to fund its growth plans.
PNB Chairman K R Kamath said the bank's liquidity condition is good and a rate hike will depend on credit demand as well as liquidity. "We may require some capital at the end of the year. We can raise something like Rs 2,000 crore, depending on the interest rate condition."
The PNB chairman said the bank may enter the bond market in the third or fourth quarter to raise tier I or II capital because existing interest rates are too high. "We are just waiting for the interest rates to soften in the third or fourth quarter, maybe that is the time we will enter the market and raise Tier I or Tier II capital."
The bank is expecting a loan growth of 20-22 per cent in the current financial year, despite an increase in interest rates in the last 15 months. The RBI had raised key policy rates by 25 basis points last week to tame inflation. This was the tenth time that RBI had raised policy rates since early 2010.
Asked about the slowdown in credit growth due to a series of rate hikes by the RBI, Kamath said there has not been much of an impact on the bank. Its advances are growing at the rate of 24 per cent on a year-on-year basis.
Kamath also said the bank plans to enter Australia through a representative office and it has has already got a licence in this regard. "Our licence for a subsidiary in Canada is pending with the regulator of that country and we are pursuing it. We are also pursuing our application for upgrading our office in Oslo in Norway into a full-fledged branch."
Last year, the bank had acquired a majority stake in Kazakhstan-based JSC Dana Bank for $23.7 million.