Bank of Maharashtra not to raise savings bank rate

KOLKATA: Bank of Maharashtra said it is not going to raise savings bank rate immediately as it feels savings deposits are not interest sensitive.

Its chairman and managing director Anup Sankar Bhattacharya told ET: "I don't feel the urge to raise interest rate on savings deposit."

Reserve Bank of India has deregulated the savings bank rate last week which has prompted small private banks like IndusInd Bank, Kotak Mahindra Bank and Yes Bank to raise the rates. Earlier, the rate was fixed at 4%.

IndusInd Bank said it will offer 5.5% rate for balance up to Rs 1 lakh and 6% for over Rs lakh. Kotak Mahindra Bank and Yes Bank raised the rate 200 basis points to 6% for deposits over Rs 1 lakh.

Bhattacharya said the competition for savings deposit mobilisation will largely be limited in urban centres and his bank mobilises a bulk of its deposit from rural and semi-urban centres without much competition.

The Pune-based state-run bank has 1.20 lakh crore savings bank customers of whcih 1.14 lakh core have below Rs 1 lakh deposits.

Source: EconomicTimes