Bangalore, June 20: A reversal of soft interest rate regime would hurt the banking industry, Vijaya Bank chairman and managing director M S Kapur said here today. "The unprecedented decline in interest rates, no doubt has helped the banks in improving their working results. A possible reversal of the prevalent interest pattern holds severe threat to the banking industry," Kapur told shareholders at the bank's third annual general meeting here.
"The new 90 days NPA norms, which will be effective from March 2004 onwards is yet another threat to the profitability of banks," Kapur said adding that Vijaya Bank was "fully aware of these threats" and have already taken necessary steps to combat them.
He said the write-off of the entire VRS expenses, making substantial provisions towards NPAs are all the steps taken by the bank in this direction.
Kapur also said the bank had made rapid computerisation efforts including in 150 additional branches during the current financial year, besides implementing core banking solution in select branches. Bureau Report