State-run Corporation Bank today said its base rate is likely to be fixed between 8.25-8.5 per cent and that it will announce the rate after its board meeting later this month.
"Our base rate is likely to be between 8.25-8.5 per cent. Our board is meeting on June 22 to finalise the rate," Corporation Bank Executive Director Narendra Singh told reporters here.
Presently, around 40 per cent of the bank's loans are given at sub-PLR rates, he said.
The bank does not expect any major loss of business in terms of short-term corporate loans with the base rate coming in, Singh said, adding that the bank expects demand from corporate customers will continue.
On credit growth, the Corporation Bank official said it has been flat in the first three months of this fiscal (FY'11). However, it expects overall credit growth for the fiscal to be around 25 per cent.
"The (credit) growth in the first three-months (of FY'11) has been flat. But in the months ahead, we expect demand to pick-up and growth for the fiscal is likely to be around 25 per cent," he said, adding that the bank's loan-book stood at Rs 63,000 crore as on March 31, 2010.
Corporation Bank has targeted a total business of Rs 2 lakh crore in the current fiscal, Singh said.
Recovery of bad loans in the first three months of FY'11 also picked up, with the bank recovering around Rs 100 crore, he said.
The bank has also raised interest rates for its 1,000-day deposit scheme by 0.5 per cent to 7.25 per cent effective June 15, he said.
Asked if the bank was considering a lending rate hike, Singh said if the Reserve Bank hiked its policy rates, the bank might up its lending rates so as to pass on the additional cost to customers.
