Indian Bank has mopped up Rs 3,000 crore by raising deposits rates a fortnight ago, much before RBI raised its lending and borrowing rates.

The apex bank had raised key short-term rates as part of its firefight against rising inflation. TM Bhasin, chairman and managing director, Indian Bank, told FE the bank had taken the decision to hike its deposit rates much before the apex bank?s decision after sensing a tightening liquidity scene in the wake of the wrapping up of 3G and BWA spectrum auctions.

The bank had hiked its deposit rates ahead of peers despite its net non-performing assets growing exponentially to Rs 511.39 crore during the quarter ended June 30,2010, from Rs 100.89 crore in the year-ago period, a spike of over 406.88%. Gross NPA too rose 1.45% as of June 2010 from 0.91% a year ago, forcing the bank to address the issue immediately.

As part of its efforts, the bank shifted to the CBS system which generated the entire data. The bank has also formed a team of two general managers in order to recover the addition of Rs 830 crore in bad assets. It may be recalled that Indian Bank, which had huge bad assets, was bailed out by the Centre in the past.

?We took a proactive role in raising the deposits rates on July 14, paving the way for mopping up enough liquidity which may be needed after the 3G and BWA auction process. This, along with some tweaking in short-term deposit, would have yielded close to Rs 3,000 crore in the bank?s kitty,? said Bhasin.

Accordingly, the bank has raised deposit rates for one year to less than two years from 6.5% to 7%, for two years to less than three years from 7% to 7.2% and three years and above from 7.25% to 7.5%. Senior citizens would continue to get an additional interest of 0.5%. The bank plans to graduate from a core-banking system (CBS ) to customer relations management (CRM), Bhasin said.