“The shape of the yield curve is signaling that we may have a reduction in the repo rate within the next six months,” said Iyer while in Goa to attend the bank’s ‘Mid Business Term Review’ for zonal managers.

“We were one of the first banks to cut the base rate from 10.25 to 10.20 in March 2014. As of now we have reduced the interest rate on the deposit side. We don’t have immediate plan to cut the base rate, we will wait and watch. We do see some of the banks cutting the base rate to 10.15. If that hurts our business we will take relevant steps,” added Iyer

She went on to add that the initiatives taken by Prime Minister Modi, specially in terms of ease of doing business in India, his investment and trade push on the international front, have improved the sentiment in the country. “The sentiment is very positive, the markets have run up, but we cannot see that happening on the ground. The reality is still muted. We however expect things to improve in about 3 months. We see this year’s GDP growth at 5.3 per cent,” said Iyer.

Revealing some positive news for BoI, she said the bank has received a Merchant Banking Licence, an approval to start a branch in Vietnam and an in-principle approval for a branch in Dubai.

Meanwhile, BoI has 9000 employees working on the Jan Dhan Yojana. Sin ce the announcement of the scheme, BoI has opened 31.65 lakh accounts and issued 23 lakh cards. Under financial inclusion the bank has Rs 1200 crore balance in 1 crore Savings Bank Accounts.