BoI's CEO Rajneesh Karnatak on penal interest impact and NIM outlook for FY25
«NIM has come down to 2.80%. However, I clarify again, our domestic NIM is at a healthy number of 3.14%. So, definitely there has been some impact with the rising cost of deposit. The NIM has been impacted and also yield on advances are flat, that is one of the basic reasons. And as regards the RBI circular on penal interest, so now we have to book under the penal charges,» says Rajneesh Karnatak, MD & CEO, Bank of India.
Let us start off with your net interest margins here. Now, we saw 25 basis points fall when it comes to the NIMs in this quarter, but going forward your cost of deposits has been rising while the yield on advances has been declining. So, what is your outlook when it comes to the net interest margin considering these factors?
Rajneesh Karnatak: As regards the NIM is concerned, our NIM we have shown at around 2.80%. However, this is the global NIM. The domestic NIM is at 3.14%. And the reason for this coming down of the NIM is one of the factors is that 15% of our global book is the international book, where the NIMs are on the lower side.
In fact, it is at the international level our NIM. So, what it has impacted is on the global level, it has impacted the overall NIM.
NIM has come down to 2.80%. However, I clarify again, our domestic NIM is at a healthy number of 3.14%. So, definitely there has been some impact with the rising cost of deposit. The NIM has been impacted and also yield on advances are flat, that is one of the basic reasons. And as regards the RBI circular on penal interest, so now
