Bank of India hints at 10-25 bps cut in base rate
Mumbai: State-owned lender Bank of India today indicated 10-25 basis points reduction in its base rate shortly.
“We will have to fall in line with our peers and hence we are also looking at a reduction in our base rate in the range of 10-25 basis points. The decision is likely next week or so,” Bank of India chairman and managing director Vijaylaxmi Iyer told reporters here.
She said the prime reason for the rate cut will be the decline in cost of funds, following reduction in the cost of deposits.
Iyer was speaking after signing two agreements with the state-owned non life insurer New India Assurance for the Pradhan Mantri Suraksha Bima Yojana (PMSBY) product and with Star Union Dai-ichi Life Insurance for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme.
Both the schemes, which will be on offer from May and implemented on June 1, will be made available for all the seven crore customers of the bank.
The bank has already opened more than 1.82 crore accounts under various financial inclusion initiatives, out of which 70.2 lakh accounts have opened since the launch of the Jan Dhan Yojana, she said.
Risk coverage of Rs 2 lakh is available in case of death for any reason under PMJJBY and Rs 2 lakh for accidental deaths and full disability under PMSBY.
Iyer also said that BoI may go for stake dilutions in various subsidiaries, including its life insurance venture.
“We are planning to bring down our stake from present 48 per cent to 25 per cent in the life insurance venture, Star Union Dai-ichi Life Insurance, once the foreign partner increases its stake from 26 to 49 per cent,” she said.
“It will help maintain our capital adequacy at the required level,” she added.
While the deposits of the bank grew 9.6 per cent, advances rose 9.7 per cent at the global level during the year gone-by.
“We expect our advances to grow in the range of 13-14 per cent during the current fiscal,” Iyer said.