India International Times Latest Business News from India
As festive season is approaching, all Indian banks from State Bank of India to Kotak Mahindra Bank, have raised their fixed deposit rates by 15 to 50 basis points.
Bulk deposit rates have been increased by 25-50 basis points for a period of one year and more than one year deposit rates have gone up to 75-125 basis points.
The hike in deposit rates is in line with the Reserve Bank of India’s (RBI) 50 basis points hike in repo rate in the month of August. Accordingly, banks have also increased their FD rates, just as the festive season begins.
The largest state-owned bank, State Bank of India, increased its deposit rate by 15 basis points on FDs maturing between 180 days and 210 days from 4.40 per cent to 4.55 per cent.
Indian Overseas Bank increased deposit rates by 10 basis points for 444 days and three years and above periods for the retail term deposits.
Indian Bank and Punjab National Bank have hiked their deposit rates by 5-15 basis points, while the private HDFC Bank has increased interest rates by around 15 basis points on fixed deposits greater than Rs 5 crore in August.
ICICI Bank increased interest rates on fixed deposits of Rs 2 crore to Rs 5 crore in August.
Kotak Mahindra Bank has also increased rates by 15 basis points for select tenures for deposits up to Rs 2 crore, CareEdge data showed.
“Going forward, banks are expected to raise deposit rates for boosting deposits to support this rising credit offtake given that liquidity is narrowing in the banking system,” said Sanjay Agarwal, Senior Director, CareEdge.
