Indian Overseas Bk sees net interest margin at 3-3.1 pct

MUMBAI, July 4 (Reuters) - Indian Overseas Bank (IOBK.BO: Quote, Profile, Research) expects net interest margins to be around 3-3.1 percent and would raise lending rates if the central bank raised the repo rate again, its chairman and managing director said.

The state-run bank's credit base grew 30 percent until June as against the industry average of 26-27 percent, S.A. Bhat told newschannel NDTV Profit on Friday.

"It will be essential for me only to curb, pick and choose and go only for the quality assets in the next three quarters so that I may be able to slow down my credit growth," he said.

Bhat also expects the central bank to raise the cash reserve ratio (CRR) by 50 basis points, if inflation touches 13 percent. Cash reserve ratio refers to the ratio of deposits banks need to keep with the central bank.

The central bank last month raised both its key lending rate and the CRR, in a bid to tame inflation, which is now running at 13-year highs.

(Reporting by Nandita Bose; editing by Sunil Nair)