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Monday, December 24, 2012

Dena Bank, Federal Bank raise rates for some term deposits

Tight liquidity coupled with a gradual pick-up in credit has prompted Dena Bank and Federal Bank to increase term-deposit rates for some tenures.

Dena Bank has upped the rates (for up to Rs 15 lakh and between Rs 15 lakh and Rs 1 crore) for 365 days and above 1 year to less than two years from 8.75 per cent to 9.1 per cent.

The public sector bank said the new deposit rates are effective from December 22.

Private sector lender Federal Bank has upped the interest rate on term deposits in the 91-119 days maturity period from 7 per cent to 7.5 per cent.

The bank has also increased the interest rate on term deposits of above one year and up to three years from 8.75 per cent to 9 per cent.

The new deposit rates in the case of Federal Bank are also effective from December 22.

Tight liquidity in the banking system is underscored by the fact that the Reserve Bank of India received 45 bids aggregating Rs 1,50,390 crore at the two-day repo auction (to borrow funds) under the liquidity adjustment facility.

Since the beginning of the third quarter and up to November 30, credit growth has outstripped deposit growth. While bank credit has grown by Rs 1,52,136 crore, deposit growth was just Rs 32,490 crore.


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