Interest Rates Not to Come Down in Next 2-3 Months: PNB

Punjab National Bank (PNB), India's second largest state-run lender, on Tuesday said interest rates are unlikely to come down in next 2-3 months as inflation is still high.

"I don't see a rate cut in the next 2-3 months," PNB chairman and managing director K R Kamath said on the sidelines of an event to announce a tie-up of the bank with digital money transfer company Xoom in Delhi.

"As the RBI Governor has said, unless inflation is controlled there is no reason to bring down the interest rates...to that extent inflation control becomes a priority for the Reserve Bank," he said.

Headline inflation accelerated to 5-month high of 6.01 per cent in May from 5.2 per cent previous month, mainly driven by high food and fuel inflation.

Asked about its fund requirements, Mr Kamath said, the bank will assess the capital position in the second half of the current fiscal year.

Based on assessment, the bank would take a call on raising funds over and above government's capital infusion plan.

During the last fiscal year, PNB got capital support of Rs 500 crore from the government.

Meanwhile, PNB announced tie-up with US-based Xoom Corporation to roll out instant bank deposit services to bank accounts in India using the IMPS (immediate payment service) platform.

The facility would help inward remittance transfer from overseas instantly even on bank holidays and weekends.

"With this our partnership with Xoom would reach to higher level by providing instant deposits to NRI's. This IMPS system and Xoom will provide instant deposits for NRI's sending money to PNB and other bank accounts in India," he said