PNB CEO Sees Interest Rate Cut Possible Amid Robust Profit Growth

PNB CEO Atul Kumar Goel anticipates a 20 to 25 basis points interest rate cut by March 2025, citing favorable conditions. Despite the RBI keeping rates constant, Goel remains optimistic about loan growth, reporting a 145% surge in net profit and a rise in savings deposits.

Atul Kumar Goel, Managing Director and CEO of Punjab National Bank (PNB), voiced expectations for a 20 to 25 basis points cut in interest rates by March 2025, should economic conditions remain favorable. This statement came despite the Reserve Bank of India's recent decision to maintain its repo rate at 6.5% for the tenth consecutive meeting.

The US Federal Reserve has recently adjusted its policy, reducing interest rates by 50 basis points—its first cut in four years. In contrast, inflation in India has steadied at 4.6% in the first half of 2024-25, a decrease from 5.5% recorded during the same period last year. Goel asserted that deposit rates have peaked and foresees no further hikes ahead.

Goel observed significant growth in the loan sector, with home loans rising 18% and car loans increasing 25%, indicating a particular demand in Tier 2 and Tier 3 cities. The financial results unveiled by PNB showed a stunning 145% increase in net profit for the July-September 2024-25 period, reaching Rs 4,303 crore. The bank also reported growth in its savings deposits by 3.7% and a 5.99% enhancement in its Net Interest Income.

(With inputs from agencies.)