Banks hike deposit rates ahead of festive season

MUMBAI: Most banks are increasing their deposit rates for boosting deposit to support rising credit off-take as liquidity in the banking system has narrowed. The hike in deposit rates are in line with the Reserve Bank of India's (RBI) 50 basis points hike in repo rate in the August monetary policy. The rise in deposit will help banks fund the demand for loans during the festive season. "Going forward, banks are expected to raise deposit rates for boosting deposits to support this rising credit offtake given that liquidity is narrowing in the banking system. Selectively, banks have already been raising rates across certain tenures and categories," said Sanjay Agarwal, Senior Director, CareEdge. (IANS)

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