While driving from the Chhatrapati Shivaji Maharaj International Airport to Bandra Kurla Complex, Mumbai’s second business district, on the Western Express Highway, large billboards on rising deposit rates of banks scream for attention. When did you last see such a war for deposits?
I have checked with many bankers, and even central bankers. None of them can recall when. There might have been skirmishes for deposits in the past, but not a war of such scale. A vibrant social media is also making us aware of its intensity. A few months ago, a short video clip showing Canara Bank hawking deposits in a Mumbai suburb went viral on WhatsApp.
The Reserve Bank of India (RBI) gave banks the freedom to decide on rates for fixed deposits in the mid-1990s; the savings bank rate was freed in 2011. On the current account, customers don’t earn any interest.
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