Mumbai India’s largest lender State Bank of India (SBI) on Tuesday increased its deposit rates by 15-20 basis points across three maturity buckets.
The hike comes after the Reserve Bank of India (RBI) hiked the repo rate twice in a row in the May and June meetings of the Monetary Policy Committee to rein in inflation. SBI last hiked deposit rates in February, data available on its website showed.
On Tuesday, SBI raised rates on deposits between 211 days to less than 1 year by 20 bps to 4.6% per annum; Deposits from 1 year to less than 2 years will also get 20 bps more, at 5.3%; And those who are 2 years to less than 3 years old will get 15 bps more, at 5.35%.
CareAge Ratings said the total deposits in the banking system stood at Rs 165.7 trillion as on May 20, up 9.3% over the previous year. Overall, bank deposits have increased by Rs 14.1 trillion in the last twelve months.
“The banking system has been maintaining a liquidity surplus since June 2019, barring the last few fortnights, due to higher growth in bank deposits versus credit disbursements,” the report said on June 13.
On June 10, DBS Bank India hiked term deposit rates by 10-50 bps. Private lender Kotak Mahindra Bank also recently announced a hike in savings account interest rate as well as fixed deposit interest rates for various tenors.
Shanti Ekambaram, Group President-Consumer Banking, Kotak Mahindra Bank, had said in a statement that interest rates are on an upward trend.