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HDFC Bank raises FD rates by 20 basis points with effect from June 10

The move comes even as the Reserve Bank of India decided to keep the policy repo rate unchanged in the June review of monetary policy


HDFC Bank | Image credits: Bloomberg

BS Reporter Mumbai

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HDFC Bank – the largest private sector lender – has hiked retail fixed deposit rates by upto 20 bps across various buckets with effect from June 10.

The move comes even if the Reserve Bank of India decided to keep the policy repo rate unchanged in the June review of monetary policy. The regulator, however, asked banks to re-strategize in view of widening gap between credit and deposit growth.

The highest interest rate offered by HDFC Bank is for the 18 months to less than 21 months category where the rate is 7.25 per cent. The bank offers 7.10 per cent for 15 to 18 months category. In the one year to 15 months bucket, HDFC Bank will offer 6.60 per cent. Senior citizens will get 50 bps more than the rate offered to others.

In May, country's largest bank State Bank of India has hiked interest rate on term deposits by 25-75 basis points for deposits up to 1 year. The hikes were mostly in the less than one year category.

Another public sector lender Bank of India (BOI) has floated a new retail term deposits bucket of 666 days carrying 7.3 per cent annual interest rate.

The banking regulator has been cautioning banks on high credit deposit rates and requested the boards to relook and re-strategise their business plans, taking into account, the widening gap between the growth in deposits and growth in their loan book.

Bank deposits recorded a growth of 13.3 per cent year on year till May 17, while credit growth was 19.5 per cent, taking into the impact of merger of HDFC Ltd into HDFC Bank.

According to RBI data, in response to the increase of 250 basis points (bps) in the policy repo rate, the weighted average domestic term deposit rates (WADTDRs) on fresh deposits and outstanding deposits rose by 245 bps and 188 bps, respectively.

The weighted average lending rate (WALR) on fresh rupee loans rose by 204 bps while that on outstanding loans rose by 111 bps (May 2022 – April 2024).

ICICI Bank - the second largest private sector lender - revised deposit rates for single deposits of Rs 2 crore and less than Rs 5 crore with effect from 11 June. The bank is offering 7.30 per cent for a maturity bucket of 1 year to 389 days. The extent of the revision is however not known.

TABLE: Peak deposit rates offered by banks
Bank Rate Bucket  
SBI *7.10% 400 days  
HDFC Bank 7.25% 18 months to < 21 months  
Bank of India 7.30% 666 days  
*Special deposit scheme, valid till 30, Sep 2024

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First Published: Jun 11 2024 | 8:34 PM IST

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