The majority of its retail fixed deposit rates were increased by 40—75 basis points (bps) on Wednesday by India's largest private lender, HDFC Bank Ltd. This move makes it the newest major bank to take similar action to encourage sluggish deposit growth.
As a result of depositors choosing to invest their money in mutual funds and shares in order to earn higher returns in the face of high inflation, growth in bank deposits has substantially lagged loan growth, raising concerns for the central bank.
In the meantime, lenders are engaged in a "deposit rate war" as a result of decreasing liquidity and increasing credit demand.
The largest lender in India by assets, State Bank of India, increased deposit rates on Tuesday by 15 to 100 basis points across all tenors, while smaller private-sector rival Kotak Mahindra Bank increased fixed deposit rates by up to 7%.
According to the most recent central bank figures, during the two weeks ending November 18, deposit growth at Indian banks was 9.6% y/y, while loan growth was 17.2%.
For feedback and suggestions, write to us at editorial@iifl.com
Related Tags
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Securities Support WhatsApp Number
+91 9892691696
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.