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Signalling a hardening of interest rates in the industry, ICICI Bank has hiked its deposit rates for select tenures by up to 0.5% with immediate effect
Signalling a hardening of interest rates in the industry, India's largest private sector lender, ICICI Bank Ltd, on Thursday hiked its deposit rates for select tenures by up to 0.5% with immediate effect.
The Bank will now offer 6.75% for deposits having 390-days maturity as against 6.5% earlier, an ICICI Bank spokesperson told PTI in Mumbai.
Similarly, deposits having 590-days maturity will now offer an interest rate of 6.75% as against the earlier rate of 6.25%, the spokesperson said.
The hike in deposit rates comes shortly after another leading private sector lender, HDFC Bank Ltd, recently announced a hike of up to 1.5% in its deposit rates across some maturities.
Earlier this month, the government-owned IDBI Bank Ltd had also hiked its deposit rates by 0.25% for some tenures.
The country's largest lender, State Bank of India (SBI), however, had said that it may not hike deposit or lending rates at least till May-June, as the Bank has surplus liquidity.
"That (rate hike) may not happen till May-June—till the liquidity surplus goes away from the system," SBI chairman OP Bhatt had said.
Banks started hiking their deposit rates apparently due to the tightening of liquidity by the Reserve Bank of India, which asked banks to park more cash in the mandatory reserve window last month.
The central bank hiked its cash reserve ratio (CRR) by 0.75% to 5.75%, sucking out around Rs36,000-crore liquidity from the system.
With ICICI Bank and HDFC Bank taking the lead, more lenders are likely to follow the suit in the coming days.