A day after the Reserve Bank of India hiked policy rates and signalled banks to raise their deposit and lending rates, the country’s second largest private sector bank — HDFC Bank — decided to increase its deposit rates by up to 75 basis points beginning Friday, July 30.
Deposit rates for a tenure of up to six months will be increased by 75 basis points while those for tenures of more than one year will increase by 25 basis points
Paresh Sukthankar, ED, HDFC Bank said, “(in light of) the fact that the RBI raised the policy rates and the system will remain net deficit in terms of liquidity, we believe that the appropriate strategic response would be to accelerate deposit growth and offer higher rates on deposits.”
A hike in lending rates, too, is on the cards. “The hike in lending rates would come with a lag of a few weeks as the higher cost of funds will translate to a slightly higher lending rates.”