HDFC BANK RAISES FIXED DEPOSIT RATES
HDFC Bank on Wednesday became the first lender to increase its fixed deposit rates by up to 75 basis points after RBI raised key short-term rates.
With deposit rates going up, the bank may also raise lending rates in the next few weeks, a bank official said.
The revised fixed deposit rates would be effective from July 30.
When contacted, HDFC Bank Executive Director Paresh Sukthankar said, “We have decided to raise deposit rates across various tenors between 25-75 basis points.”
The rate hike was logical as the banking system is expected to remain in marginally deficit situation coupled with expected strong credit growth in the coming days, he told PTI.
The economy is expected to grow at 8.5 per cent in 2010-11 as per the RBI projection and going forward loan growth would pick up, he added.
Giving details of increase in deposit rates, Sukthankar said that term deposit rate with maturity in between 91 days and 6 months would be raised by 75 basis points to 5.25 per cent from the existing 4.5 per cent.
For fixed deposit in between 9 months and one year, the new rates would be higher by 50 basis points at 6.25 per cent while for 1 year 16 days category it will be 7 per cent, 25 basis points more than the existing rate of 6.75 per cent.
Asked if it would translate into higher lending rate, he said, “It would not immediate, but as we move along short term lending rates would go up. I do expect the lending rates would reflect this in the next few weeks.”
However, it would not mean change in the base rate, which was fixed in beginning of this month, he said.
