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Race for deposits: Banks lure customers with new schemes, higher interest

Banks are seeking to boost term deposits to keep pace with growth in lending

January 25, 2023 / 06:08 PM IST

Banks including RBL Bank, Punjab National Bank, Bank of India and Yes Bank are trying to lure more customers by offering new deposit schemes and higher interest rates in a bid to keep up with credit growth.

Mumbai-based RBL Bank launched a smart deposit scheme, a flexible term deposit, on January 24, offering interest of 7.55 to 8.3 percent for a tenure of 15 months. This scheme offers flexibility in savings and investment options.
Public sector lender PNB introduced a 666-day special fixed deposit scheme on December 25, offering interest ranging from 6.1 percent to 8.1 percent across customer segments.

Bank of India started a new 444-day deposit scheme earlier this month, offering interest rates of up to 7.55 percent. The bank also came out with a Star Super Triple Seven Fixed Deposit scheme for a single tenure of 777 days, offering an interest rates of 7.25 percent to 7.75 percent.

Deposit growth has been lagging advances and although banks have started offering high interest rates on deposits, they are still behind the increase in the central bank’s repo rate. According to an India Ratings report, deposit growth muted at 9.2 percent on-year as of December 30.