Bank of Maharashtra hints at lending rate cut

Public sector lender Bank of Maharashtra might effect a lending rate cut in some segments next week.

"We might effect an interest rate cut in the range of 0.25-0.50% in some segments. But, there will not be an across-the-board reduction," MD Mallya, chairman and managing director, Bank of Maharashtra, told PTI.

While cutting rates, the bank would take care to see that its existing customers were benefited. The bank's asset-liability committee (ALCO) is scheduled to meet next week and will review the its lending rate, he said.

According to him, cost of funds for the bank and for the banking industry as a whole is likely to come down and lenders would consider this factor as well when reviewing their lending rates.

The country's premier housing finance company, HDFC, had recently announced a 0.25% cut in its Retail Prime Lending Rates (RPLR), shortly after the apex bank hinted that there was a strong case for banks for a rate-cut in its quarterly policy review.

Buoyed by a rise in its interest income, trading profits and recoveries, the Pune-based bank has achieved a 35.06% growth in net profit for the quarter ended December 31, 2007.

 Net profit grew to Rs 100.38 crore during the quarter from Rs 74.32 crore in the year-ago period, while total income rose to Rs 985.97 crore from Rs 765.30 crore on a year-on-year basis.