The Reserve Bank of India (RBI) has asked banks to put up bulk deposit rate on their websites, to stop banks from offering exorbitant rates to corporate depositors.
According to RBI norms, no bank can offer varying rates on the same day at different locations.
According to bankers, some of the banks are offering as much as 200 basis points higher than the card rate to their corporate clients.
Bulk deposits are corporate deposits that are generally Rs 1 crore and above with maturity of up to one year.
The central bank’s directive comes following the finance ministry’s effort to discourage banks’ rush for bulk and certificates of deposit, which are of high cost and adversely impact margins.
The ministry had asked banks to cut down their proportion of high cost deposits (bulk deposit and certificates of deposit) to 15 per cent, with a cap of 10 per cent on bulk deposits.
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About 25-30 per cent of the deposits of public sector banks are bulk in nature.
The central bank and the finance ministry’s concern over exorbitant bulk deposit rate comes on the back of banks scrambling for funds during the end of the previous financial year.
In March, bulk deposit rate crossed 12 per cent, higher by 100 basis points in a month. As a result, deposit growth in March swelled by Rs 3 lakh crore — one third of the deposits garnered in 2011-12.
The finance ministry and RBI had also asked the public sector banks not to bid for bulk deposits.
Earlier this week, Mumbai-based public sector lender Bank of India reduced the rate on interests on bulk deposits in some tenors by 25-50 basis points.