Indicating toughening of interest rates in the industry, India’s biggest private sector lender ICICI Bank on Thursday increased deposit rates in certain tenures by up to 0.50% with immediate effect.
After this, the rate on deposits for 390 days goes up to 6.75% as against 6.5% previously, ICICI Bank spokesperson said. Interest rates on deposits with maturity period of 590 days have gone up to 6.75% from previous 6.25%, said the spokesperson.
The increase in deposit rates follows another major private sector lender, HDFC Bank, hiked rates by up to 1.5% on deposits across certain maturities.
Earlier this month, government-owned IDBI Bank had also increased its deposit rates by 0.25% for few tenures.
But India’s biggest lender, State Bank has said it may not increase deposit or personal loan rates, at least till June as it has excess liquidity.
The increase in deposit rates follows RBI’s action of tightening liquidity in its policy review last month. It had hiked its cash reserve ratio (CRR) by 0.75% to 5.75%. But with ICICI Bank and HDFC Bank increasing the rates, other banks are also expected to do the same, thus hiking the personal loan rates.