|Chennai||Rs. 24840.00 (-0.36%)|
|Mumbai||Rs. 25460.00 (-0.16%)|
|Delhi||Rs. 25450.00 (2.21%)|
|Kolkata||Rs. 25000.00 (0%)|
|Kerala||Rs. 24700.00 (0%)|
|Bangalore||Rs. 25050.00 (1.42%)|
|Hyderabad||Rs. 24930.00 (1.63%)|
Mumbai-based public sector lender Bank of India on Tuesday reduced the rate on interests on bulk deposits in some tenors by 25-50 basis points.
For deposits over Rs 1 crore, the bank will now pay 7.5 per cent for deposits between 46 and 90 days instead of eight per cent earlier. For deposits between 91 and 179 days, the bank has revised its interest rate to eight per cent from the earlier 8.25 per cent. The lender will now pay a rate of 8.5 per cent for the depositors who park the money with the bank for nine months to less than a year.
However, it raised deposit rates for retail deposits in short tenors by 150 basis points. The bank will now offer an interest rate of seven per cent instead of 5.5 per cent earlier for deposits below Rs 1 crore in the tenor of one month-3 months.
Bank of India's chief financial officer Gauri Shankar said "the rates have been revised keeping in mind asset liability management requirements and need to be in line with market trends. The bank wants to increase the share of retail in the short term deposits, and the repricing of bulk deposits is happening at lower rates (25-50 basis) compared with few months ago."
At end of June, share of bulk deposits was 15 per cent of total deposits.
Earlier in the day, State Bank of India (SBI) Chairman Pratip Chaudhuri said the bank will take a call on reducing lending and deposit rate after studying the net interest margin in August. According to analysts, SBI's margin may come under pressure as the bank has effected sharp cuts in spreads on some loans like housing and auto loans. On the other hand, SBI will benefit from the reduction in statutory liquidity ratio - as announced by RBI last month - as it will release Rs 11,000 crore for the bank that can be deployed in more productive assets.
SBI's net interest margin was five basis point lower year on year at 3.57 per cent in the first quarter. However sequentially it was lower by 32 basis points. In the January-March quarter the bank had posted NIM of 3.89 per cent.
Another state-run lender Union Bank of India said some adjustments in the deposit rates are expected over the next few days. With inflation falling below seven per cent, there is some scope for a downward revision in the deposit rates, said a senior official from Union Bank of India.