IOB raises deposit rates by up to 50 bps

On the heels of leading lenders raising the rates, the Chennai-based Indian Overseas Bank (IOB) today hikes its deposit rates by up to 50 basis points (bps).

"We have decided to raise the deposit rates considering the current market conditions. We expect the rate to firm up in the near future," IOB Executive Director Y L Maran told PTI.

The rates for fixed deposit of over five years has been raised by 50 bps to 7.25 per cent, the bank said.

For the deposits of under five years, interest rate has been hiked by 25-50 bps. The new rates for deposits between nine and 12 months will be 6 per cent and for FDs of over one year but less than 5 years will be 6.75 per cent. Deposits of Rs 1 crore and over will attract an interest rate of 6.5 per cent, up from 6 per cent earlier.

As regards the lending rates, Maran said, "There is no plan to increase the lending rates at the moment."

Earlier Bank of India, ICICI Bank, HDFC Bank and IDBI Bank had increased their deposit rates.

The Bank of India announced raising the rates by up to 150 bps for deposits of various maturities on March 11, while HDFC Bank raised it by up to 150 bps for select maturities, ICICI Bank raised by up to 50 bps across different maturities. The government-owned IDBI Bank also hiked its deposit rates by a quarter percentage point in some tenures.

Banks raising deposit rates follows the Reserve Bank hiking by 75 basis points the CRR in January.

However, the largest lender State Bank said it may not hike deposit or lending rates until June as the bank has surplus liquidity.