SBI, PNB hike deposit rates
Bank of India says it may follow suit on Monday. Banks also say they will pass on the benefit of high rates to depositors. The new rates will come into effect on June 30india Updated: Jun 27, 2008 20:17 IST
Senior citizens banking with State Bank of India and Punjab National Bank (PNB) have something to cheer about. The bank has raised deposit rates on maturities of one year and less than three years by 75 basis points (100 basis points is 1 percentage point), from 9.25 per cent to 10 per cent.
The new rates will come into effect from June 30, 2008. While this is still 1.42 percentage points less than the current inflation rate of 11.42 per cent, the move offers
senior citizens to get a higher return on their fixed deposits. Those in existing deposits can snap them and reinvest the same to get higher returns.
However, there was not much change in the rates for deposits above three years, with both slabs—three years to less then five years and five years to 10 years—being clubbed and pegged at 9.5 per cent for senior citizens.
PNB also hiked its deposit rates on Friday by 25-75 basis points, along with raising its prime lending rate by 50 basis points, from 12.5 per cent to 13 per cent.
Close on the heels of raising lending rates on Thursday, SBI on Friday raised deposit rates, particularly on deposits above six months maturity for other depositors also. At 75 basis points, the raise to 9.5 per cent is the steepest on deposits in the maturity range of one year and less than three years, while above six months and less than one year deposits will fetch 50 basis points higher at 8 per cent.
Meanwhile, Bank of India is set to hike lending rates as well. “We may raise rates by 50 basis points,” said TS Narayanasami, chairman and managing director, after re-launching the bank’s website. “Our asset-liability committee is meeting on Monday.” The bank is also planning to pass on the benefit of higher lending rates to depositors.