The deregulation of NRE deposit rates by Reserve Bank of India has heated up the rate fight among the banks. The banks have hiked the deposit rate considerably which is enough to lure customers to invest with them.
Almost all the leading lender including SBI, HDFC Bank and other have already increased their deposit rates. Several banks like ICICI Bank and South Indian Bank have even hiked the rates twice within a very short time frame.
The banks have however made it clear that the revised rates are applicable only on fresh and on renewed deposits. The banks are trying to outrun each other by offering higher interest rates. They intend to increase the inflow of foreign currency with them.
The Chairman of City Union Bank, Mr. Balasubramanian said “If we do not offer a competitive rate, our existing depositors would move their investment to some other bank.”