After HDFC Bank, now ICICI hikes deposit rates

Signalling hardening of interest rates in the industry, India's largest private sector lender, ICICI Bank today hiked its deposit rates in select tenures by upto 0.50 per cent with immediate effect.

With this, the bank will now offer 6.75 per cent rate for deposits having 390-days maturity as against 6.5 per cent earlier, ICICI Bank spokesperson said here.

Similarly, deposits having 590-days maturity will now offer an interest rate of 6.75 per cent as against the earlier rate of 6.25 per cent, the spokesperson said.

The hike in deposit rate comes shortly after another leading private sector lender, HDFC Bank recently announced an upto 1.5 per cent hike in its deposit rates across some maturities.

Early this month, government-owned IDBI Bank had also hiked its deposit rates by 0.25 per cent in some tenures.

The country's largest lender, State Bank, however, had said that it may not hike deposit or lending rates atleast till May-June as the bank has surplus liquidity.

"That may not happen till May-June till the liquidity surplus goes away from the system," Bhatt had said.

Banks started hiking their deposit rates apparently due to the tightening of liquidity by the Reserve Bank, which asked banks to park more cash in the mandatory reserve window last month.

The central bank hiked its cash reserve ratio (CRR) by 0.75 per cent to 5.75 per cent sucking out around Rs 36,000-crore liquidity from the system.

With ICICI Bank and HDFC Bank taking the lead, more lenders are likely to follow the suit in the coming days.