Bank of Baroda hikes short-term deposit rates

Bank of Baroda has upped interest rates on short-term deposits of less than one year duration by up to 25 basis points.

The new interest rate on the first three deposit slabs – 7 to 14 days; 15 to 45 days; and 46-90 days – is 5 per cent, against 4.75 per cent earlier. The deposit rate hikes are effective from today.

The new interest rates on deposits in the 91-180 days and 181 to 270 days maturity slabs are 7.25 per cent (7 per cent earlier) and 7.75 per cent (7.60 per cent).

Term deposits in the 271 days to less than 1 year maturity slab will now fetch 8 per cent (7.75 per cent).

All deposits rates above one year maturity are unchanged. Among the 11 maturity slabs, the public sector bank is offering the highest deposit rate – 9.35 per cent -- on the 444 days “Baroda Utsav Deposit Scheme’.

Banks are revising short-term deposit rates upwards as they are facing liquidity crunch. This is underscored by the fact that 65 banks collectively borrowed Rs 1,60,175 crore from the Reserve Bank of India under its liquidity adjustment facility on Monday.

On the assets-side, banks are likely to reduce the spreads on the base rate for some loan segments -- small and medium enterprises and auto -- to revive the investment appetite.