IDBI Bank, the seventh largest public sector bank, is expecting interest rates to come down by 50 to 100 basis points in next 12 months. But, it does not expect the rate cuts to happen in the Reserve Bank of India’s (RBI) credit policy scheduled for March 15.

“In the last policy review, RBI had paused the rate hike, but it reduced the CRR (cash reserve ratio) requirements. Going forward, while keeping inflation factor in view, we expect the lending rates to be brought down in next one year by 100 basis points,” said RM Malla, chairman and managing director of IDBI Bank on sidelines of an event held to launch Freedom Prepaid Card.

The bank is not planning to raise deposit rates in next few months. RBI had deregulated the savings deposit rates in October last year, after which, few banks had increased their rates to attract new Casa (current account, savings account) clients. “In view of the future rate cuts by the regulator, we feel, it would not be feasible for us to increase the saving deposit rates in the near future,” added Malla.

In order to drive growth in banking segment, IDBI feels that prepaid cards and similar products will be much more convenient and safe.

Naveen Surya, managing director of Itz Cash Card said, “People who have been early adopters to new technologies and products, will now be able to carry a plastic card that will be handy and at the same time provide the liberty to use it at various retail outlets. Also, it would be beneficial for those who do not have a bank account.”

According to IDBI, credit card segment does not suit their structure and they want to focus on their agricultural and retail loans. Also, in order to attract new clients, IDBI is at present offering special schemes on car and vehicle loans.

sagarsen@mydigitalfc.com