MUMBAI: Bank of Baroda has increased deposit rates through a special monsoon scheme – offering customers 7.25% on 399-day deposits and 7.15% on 333-day ones. Senior citizens will earn an additional interest rate of 0.50%, which translates into 7.75% for 399 days and 7.65% for 333 days.
Earlier this month, two private lenders, ICICI and Axis Bank, increased their fixed deposit rates. ICICI Bank offers between 3% and 7.2% for regular customers and 3.5% and 7.75% for senior citizens. Currently, most public-sector banks are offering 6.1-6.8% for deposits in the 1-2-year range. The returns offered by Bank of Baroda are the highest across tenures.
While economists have been forecasting that RBI‘s next move will be a rate cut, the gap between deposits and advances growth has led to the competition for deposits continuing.
With no relief in the cost of funds, banks have been adjusting some of their lending rates. SBI, the country’s largest lender, has raised its marginal cost of lending rate – a benchmark for some of its business loans – by 5-10 basis points across buckets (100bps = 1 percentage point). Last week, Bank of Baroda had increased its MCLR by 5bps across tenure.
According to data released by RBI, deposits grew 10.6% year-on-year as of the end of June 2024, while advances grew at 13.9%.
Earlier this month, two private lenders, ICICI and Axis Bank, increased their fixed deposit rates. ICICI Bank offers between 3% and 7.2% for regular customers and 3.5% and 7.75% for senior citizens. Currently, most public-sector banks are offering 6.1-6.8% for deposits in the 1-2-year range. The returns offered by Bank of Baroda are the highest across tenures.
While economists have been forecasting that RBI‘s next move will be a rate cut, the gap between deposits and advances growth has led to the competition for deposits continuing.
With no relief in the cost of funds, banks have been adjusting some of their lending rates. SBI, the country’s largest lender, has raised its marginal cost of lending rate – a benchmark for some of its business loans – by 5-10 basis points across buckets (100bps = 1 percentage point). Last week, Bank of Baroda had increased its MCLR by 5bps across tenure.
According to data released by RBI, deposits grew 10.6% year-on-year as of the end of June 2024, while advances grew at 13.9%.
