PNB, Canara Bank raise deposit rates by 25-50 bps

The rate revision by banks follows the RBI raising the repo rate 0.25 per cent

Public sector lenders Punjab National Bank (PNB) and Canara Bank on Friday raised interest rates in some maturity brackets 25-50 basis points.

Bangalore-based Canara Bank would now pay interest of 7.5 per cent for fixed deposits in the 46-60 day and 61-90 day maturity brackets. Earlier, the rate was seven per cent. For deposits of maturity one-two years, the interest rate was raised from 8.75 per cent to 9.05 per cent. The new rates are effective Friday.

Delhi-based PNB raised interest on select maturities by up to 0.5 per cent, effective November 11. PNB Chairman and Managing Director K R Kamath said the retail customer had to be compensated for inflation. Asked if the deposits rates would rise further, he said it would depend on how the inflation and depositor behaved. He added credit demand, too, would have a bearing on rate revision.

For PNB, fixed deposits less than Rs 1 crore in the 271 day-one year bracket would yield interest of eight per cent, against 7.5 per cent earlier. Interest for the 91-179 day maturity bracket would now be seven per cent, against 6.75 per cent earlier.

Earlier this week, private sector lender Axis Bank had revised interest rates on select maturities for fixed deposits less than Rs 1 crore. In two maturity segments, there was a rise of 0.25 per cent in interest, while nine maturity segments had seen a reduction of 0.25 per cent in interest.

The rate revision by various banks follows the Reserve Bank of India raising the repo rate 0.25 per cent in its monetary policy on October 29. After the central bank’s move, State Bank of India and HDFC Bank had raised their base rate, or the minimum lending rate, 0.20 per cent to 10 per cent.