Punjab & Sind Bank raises fixed deposit rates by up to 5 per cent

Taking a cue from other public sector lenders, Punjab and Sind Bank (PSB) has also announced an increase-- which is as steep as 5 percentage points-- in fixed deposit rates of select maturities amid tight liquidity situation.

Fixed deposits with maturity period of 7-15 days will earn 9 per cent interest as against existing 4 per cent, PSB said in a statement.

Interest rates on 15-30 days and 31-45 days fixed deposits have also been raised to 9 per cent/ Term deposits of 91-150 days will also attract 9 per cent interest rate, effective tomorrow.

However, interest rate one-year deposit has been raised by just 0.15 percentage points to 9.75 per cent from 9.60 per cent.

PSB last revised its fixed deposit rates in August last year.

Earlier this month, large public sector banks like Bank of Baroda, Bank of India also revised their deposit rates upwards.

According to analysts, the fixed deposit rate hike is mainly because of tight liquidity situation.

To improve liquidity in the system, RBI this month had reduced the cash reserve ratio (CRR)-- the portion of deposits banks require to keep with the central bank -- from 5.5 per cent to 4.75 per cent.

With the reduction, the central bank pumped in Rs 48,000 crore in the economy.

Source: EconomicTimes