Deutsche Bank India unit hikes deposit rates by upto 150 points

Feeling the heat of tight liquidity conditions, banks have begun to hike deposit rates to attract the money. After Axis Bank and HDFC Bank, now Deutsche Bank AG India unit has hiked the term deposit rates 25-150 basis points across various maturities.

The hike is quite sharp in the case of different maturities upto one year. It raised rate for 271 days to one year to 8.5% from 7%.

The hike in medium term deposits (between 1and 3 years) was moderate, 25-50 basis points.

The bank in a statement said these deposits can be booked by individuals (domestic and NRI), Hindu Undivided Families (HUFs), sole proprietors, societies, clubs, partnerships and companies.

It revised rates for Non-Resident External (NRE) deposits also in 1-3 year maturity spectrum. NRE deposits also enjoy special benefits such as (i) interest earned is exempt from tax in India and (ii) principal and interest are repatriable, bank said.

A day after the monetary policy, banks have start increasing interest rates, with leading private sector lender HDFC Bank and Axis Bank hiking the deposit rates of shorter maturities and YES Bank increasing both the lending and deposit rates.

Though the Reserve Bank of India (RBI) maintained status quo in the first quarter review of monetary policy but the liquidity tightening measures introduced a fortnight back has impacted the short term rates.