"Defaults in certain portfolios like consumer and personal loans might go up in the months ahead and banks need to be cautious to maintain the quality of their portfolios," Bank of Baroda's Chairman and Managing Director M D Mallya told reporters on Friday.
Mallya's comments came a day after country's largest lender, State Bank's Chairman O P Bhatt said that rising levels of stressed assets may push up defaults in the domestic banking system and banks need to enhance their risk management mechanisms to tackle the issue.
However,
BoB has a comfortable liquidity position and has its NPA levels under control, Mallya said, adding, "the bank has adequate headroom to raise capital but did not have any immediate plans to do so."
BoB might look at cutting its deposit rates by 0.5 per cent from December, he said. The bank has already slashed its benchmark prime lending rates by 0.75 per cent to 13.25 per cent effective from Monday.
The lender expects its loan portfolio to grow by 23-24 per cent in the present fiscal and the bank is confident to achieve this target, Mallya said.
