Bank of India is getting ready to give competition a run for their money.

M Venugopalan, the bank's new chairman-cum-managing director, is planning to cut lending rates across board.

The bank has already cut its rates for retail products such as home and personal loans and will cut its prime lending rate (PLR) for corporate loans as well.

In his first interview to the media since he took over on August 14, Venugopalan today told Business Standard: "We have already cut rates for retail loans. The asset liability committee of the bank will soon decide on a cut in our PLR."

At present, Bank of India's PLR is pegged at 11.5 per cent which is relatively high compared with other big public banks. State Bank of India as well as Bank of Baroda have lower PLR than BoI.

Venugopalan, the first Bank of India CMD to rise from the ranks, has chalked out a four-pronged growth strategy: building a technology platform, pushing retail loans, targeting small and medium sector for asset growth and over-all paring of lending rates.

A BoI general manager, Venugopalan was holding the post of executive director at Union Bank between September 2000 and August 14 this year, before taking over as BoI CMD. The bank was headless for two-and-a-half months since K V Krishnamurthy retired on May 31.

The initial plan of the bank was to outsource its entire technology requirement - a proposal which did not find favour of the board.

"We don't want to lose time. The work for putting up core banking solutions will start in eight weeks and we will roll out a pilot project in select branches in six months," Venugopalan said.

BoI has 43,000 employees spread over 2543 branches across the country. "By December next year at least 100 branches should be inter-linked. The number will go up to 300 by March 2005," he added.

Admitting that credit offtake is "poor", Venugopalan said the quantum of retail assets as percentage of total assets should go up from 16 per cent to 25 per cent.

"We will also target small and medium enterprises in a big way as this is one sector which is not interest rate sensitive. "We will speed up the loan disbursal process," he said.

At a parallel level, BoI is planning to infuse fresh blood in its ranks. "After seeking the board approval, we will recruit management graduates, CAs and IT professionals. This will be done soon," Venugopalan said.

The bank had earlier approached the finance ministry with a plan to introduce a second round of voluntary retirement scheme but the ministry has not yet cleared it.

As on June 30, BoI had deposits of Rs 64,319 crore (Rs 643.19 billion), advances of Rs 43,173 crore (Rs 431.73 billion) and investments of Rs 26,789 crore (Rs 267.89 billion). Its operating profit for April-June was Rs 453 crore (Rs 4.53 billion) and net profit Rs 205 crore (Rs 2.05 billion).

Its net non-performing assets was of 5.79 per cent and capital adequacy ratio 12.73 per cent.