Small finance banks compete for term deposits amid falling interest rates

This comes at a time when banks are flush with funds after note ban and are cutting deposit rates

With a number of small finance banks (SFBs) already operational, customers are being offered interest rates up to 150-200 basis points (bps) higher than the prevailing market rates.

This comes at a time when banks are flush with funds after demonetisation and are cutting interest rates on deposits to keep pace with the slow credit offtake. Suryoday Micro Finance, which launched a bank on Monday, is offering as high as nine per cent interest rate on term deposits, depending on maturity, (with additional 0.75 per cent for senior citizens). Rate on savings accounts has been fixed at 6.25 per cent (for