OBC hikes fixed deposit rates by up to 0.75%

State-owned Oriental Bank of Commerce (OBC) today raised fixed deposit rates by up to 0.75% across select maturities on account of tight liquidity situation.

The bank raised interest rate on domestic term deposits maturing between 91-179 days to 8.50% from 7.75% up 0.75%, OBC said in a statement.

For deposits maturing between 270 days to less than one year interest rate has been increased by 0.25% to 8.50% from existing 8.25%, it said.

However, 180-269 days term deposit would earn 8.50% from existing 8%.

The new rates would be effective from tomorrow, it added.

In order to check the depreciation of rupee, RBI in the last two week has taken a slew of steps to tighten liquidity.

As part of its continuing fight to check rupee fall, the Reserve Bank yesterday announced additional liquidity tightening measures to contain excessive speculation and volatility in the foreign exchange market.

RBI has reduced the liquidity adjustment facility (LAF) for each bank from 1% of the total deposits to 0.5%, thus limiting the access to borrowed funds from the central bank. The limit will come into force with immediate effect and continue till further notice, the RBI has said.

In another measure to suck out liquidity from the system, RBI has asked banks to maintain higher average CRR (cash reserve ratio) of 99% of the requirement on daily basis as against earlier 70%. CRR is portion of deposits that banks are required to keep with RBI.