ICICI Bank raises fixed deposit rates by up to 0.75%
New Delhi: ICICI Bank has raised fixed deposit rates by up to 0.75 per cent across select maturities due to a series of steps taken by the RBI, leading to a tightening of the liquidity condition.
The private sector bank has raised the interest rate on term deposits with 46-60-day maturity by 0.75 per cent to 7 per cent. For 61-289 days as well, the increase is by similar percentage points to 7.75 per cent, according to the ICICI Bank Website. At the same time, the bank raised interest rates by 0.5 to 7.75 per cent as compared to 7.25 per cent for fixed deposits maturing between 290 days to 1 year.
For term deposits between 1 year to 389 days, the rate has been raised by similar percentage points to 8 per cent from 7.50 per cent. The new rates would be effective from August 16, it said.
Faced by tight liquidity, the lender’s competitors including HDFC Bank and Axis Bank have not only raised fixed deposit rates but have also increased the base rate or minimum lending rate by up to 0.25 per cent. Meanwhile, some of the public sector banks such as Andhra Bank and Canara Bank have also raised interest rates.
The country’s largest lender State Bank of India has, however, gone public saying that it will not cut its rates as it is flush with fresh deposits and its reliance on retail deposits. SBI Chairman Pratip Chaudhuri had said banks with excessive reliance on wholesale funding are the ones raising the lending rates as the rates in the money markets have hardened following the RBI moves.
The cost of funds has gone up for banks as the Reserve Bank has taken a series of steps to check the fall of the rupee against the US dollar. On July 15, the RBI put in place measures to restore stability in the foreign exchange market, including raising the Marginal Standing Facility and bank rates to 10.25 per cent and restricting access by way of the repo window to Rs 75,000 crore.