New Delhi: The country's largest bank, State Bank of India has fallen in line. The bank increased deposit rates across the board by 0.25-0.50 per cent. Now lending rates too, may be headed up soon.
The country's largest bank, State Bank of India, has taken the plunge and raised deposit rates by 0.25 to 0.5 per cent across all tenures. A five year SBI deposit will earn its customers a rate of 6.25 per cent, up from 6 per cent and in line with what arch rival ICICI Bank is offering.
SBI is the last PSU bank to increase deposit rates. Other biggies like Canara Bank, Bank of Baroda, Bank of India have all raised rates in the past few weeks.
Experts say SBI has been forced to increase deposit rates, as non-food credit has been gorwing at 31 per cent while deposits have been growing less than 20 per cent.
Also in December SBI felt the pressure of redeeming it's India Millenium Deposits and that could be the reason for the bank to increase rates.
However, this may not be the last hike. Sources say that ICICI Bank which always offered a premium over the others is now looking at edging up the rates it offers depositors. If it does it will lead to a hike in retail lending rates as well, says the source.
That indeed is an opinion echoed by experts we spoke to. They say that with deposit rates being hiked by quarter to half a percent in the last two months and corporate rates also moving up to one and a half percent, retail loan rates too will have to go up.
Comments
0 comment