Following the trend of big lenders like ICICI and HDFC Bank, the Indian Overseas Bank has also hiked deposit rates for the deposits coming to the bank. The rise in deposit rates has been to the extent of 50 basis points. The bank is a Chennai based entity.
"We have decided to raise the deposit rates considering the current market conditions. We expect the rate to firm up in the near future," IOB executive director YL Maran said.
Fixed deposit rates for deposits having five year maturity period have been raised by 50 bps to 7.25 %, the bank said.
Deposits under five years will have a rate hike by 25 to 50 bps. The revised rates for deposits having tenor from nine to twelve months will be 6%and for those maturing in the range of more than one year to less than five years, the rate will be 6.75%. Deposits of Rs. 1 crore and above will fetch interest of 6.5% from 6%.
Speaking on lending rates, Maran said, "There is no plan to increase the lending rates at the moment."
Earlier HDFC Bank had increased deposit rates in the range of 50 -100 basis points. Followed by HDFC was ICICI bank which also hiked its deposit rates by 50 bps on select maturities. The pioneer in the case was IDBI Bank.
The basic reason behind this deposit rate hike has been the increase in CRR by the RBI by 75 basis points.
However, SBI has denied any chances of rate hike till May -June. The banks are on this move because they want to borrow more and more money from customers.