State Bank of India (SBI) will raise its deposit rates next month, a senior official at the bank said on Thursday.
?We are not planning a hike in deposit rates immediately,? the official said, adding deposit rates will be reviewed at a meeting of the bank?s Asset-Liability Committee meet. The meet is scheduled over the next few days.
On Wednesday, private sector lender HDFC Bank raised its deposit rates by 25-75 basis points. State-owned Central Bank of India, too, raised its deposit rates by up to 50 basis points.
More banks are likely to announce a hike in deposit rates in coming days. This follows Reserve Bank of India?s (RBI) rate hikes in the first quarter review on Tuesday.
Deposit rates are set to rise because pace of growth lagged credit offtake. As per latest the RBI data, deposit growth was about 15% as on July 2 from a year ago, while loan growth stood at 22%.
RBI has set a target of 18% growth in deposits and a credit growth target of 20% for 2010-11.
?RBI has given signals and we will take a decision (on raising deposit rates) after looking at our asset-liability portfolio,? the State Bank official said. RBI governor D Subbarao had said deposit rates as well as lending rates would rise as credit demand picks up. The SBI official also indicated that lending rates would rise following a hike in deposit rates.
