The tight monetary policy measures adopted by Reserve Bank of India the whole year has kept banks engrossed in interest rates for the major part of 2010. Towering inflation figures are in fact an indicative that the rate game would continue in 2011 too.
RBI has raised interest rates six times this year thereby leading banks to raise interest rates of deposits as well as loans. Home loans, auto loans as well as corporate loans have gone up by about 2% this year.
There has been a corresponding rise in fixed deposit rates too. While loans are now priced at around 8 to 11%, deposits fetch the customer around 8-9% interest.
So far many banks have brought changes in interest rates of deposits as well as loans. In August, many major lenders including State Bank of India , Punjab National Bank , Bank of Baroda , Bank of India, Oriental Bank of Commerce and Canara Bank raised interest rates.