Within a week of the Reserve Bank increasing its major rates, private sector bank Kotak Mahindra Bank (KBM) has hiked term deposits rates by 0.25%.
The rise in the rate is valid for deposits whose maturity exceeds a year and is effective immediately, the statement from the bank said.
So as to control inflation, the RBI had hiked its short-term lending rate (the repo rate) by 0.25% to 6% and borrowing rate (reverse repo) by 0.50% to 5%.
Post the increase, bankers had stated there will be an increase in deposit rates in the short term which subsequently will lead to rising lending rates too.
KMB is the first bank to increase its deposit rates from the time the RBI undertook mid-quarter review previous week.
As per the new rate layout, deposits whose maturity exceeds one year but is not more than 389 days will carry an interest of 7.25% per annum while those from 5-10 years carry an interest of 7.75%, the statement said.
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