Kotak ups below 1-yr deposit rates by 0.25 per cent; others to follow
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A host of private and state-owned banks like Union Bank of India, Bank of India and Axis Bank are likely to up their deposit rates by 0.25-0.5 per cent in the next few days taking a cue from the Reserve Bank’s rate actions early this week.
Talking to PTI, senior officials of these banks said their asset liability committees will meet in the next few days to decide the quantum and tenors to effect the rate hikes and are watching the market-movements closely.
Meanwhile, private sector lender, Kotak Mahindra Bank said it has already revised its deposit rates by 0.25 per cent early this week for maturities less than a year and is assessing the market trends to decide whether to hike the rates further.
“We have raised deposit rates by 0.25 per cent for maturities below one year following the RBI rate action. That was the assessment that time. We are still watching the market and would take further actions if necessary,” a senior Kotak Mahindra Bank official said.
To fight inflation, the Reserve Bank, on Tuesday, hiked its overnight lending rate (repo) by 0.25 per cent to 5.75 per cent and reverse repo, at which it absorbs deposits, by 0.5 per cent to 4.5 per cent. Wholesale inflation, which stood at 10.6 per cent in June, is staying in double-digits since February.
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