Lenders likely to hike deposit rates up to 25 bps this festival season

Only those with asset-liability management mismatch would consider upward rate revisions

The Reserve Bank of India’s (RBI’s) decision to withdraw the incremental cash reserve ratio (I-CRR) is expected to benefit banks during the festival season. They are likely to increase deposit rates by up to 25 basis points (bps) in select maturity buckets. The rise in demand for funds to cover tax payments and meet quarter-end business targets could influence rate decisions by banks, according to bankers and money market executives.

Not all banks are expected to resort to rate hikes; only those with asset-liability management mismatch in specific buckets would consider upward rate revisions.

Delhi-based Punjab National Bank has raised