Public sector lender, Punjab&Sind Bank plans to achieve a 3% rise in its net interest margin (NIM) this fiscal with its inital public offering (IPO) coming this month.

"There will be improvement in the NIM. We are aiming at three per cent for the whole year (2010-11)," Punjab & Sind Bank executive director P K Anand said.

Net interest margin refers to the difference in the interest earned by banks by way of advances and interest given out to depositors. It is an indicator of the level of operating margins of a bank.

Upto September 2010, the bank posted a NIM of 2.79% as compared to 2.32% in the same period one year back.

Talking about rise or fall in interest rates, Anand said that base rate of the bank has been reviewed to 8.45% and it is to be reviewed again in December.

The bank is coming up with its IPO this month. Speaking about it, Anand said that the proceeds of the IPO would be utilized by the bank for expansion purposes and funds generated would be used to maintain credit growth for the upcoming 2-3 years.

He said that the capital adequacy ratio of the bank would also be raised to 14% from the existing 13.1%.