IDBI Bank hikes FD rate to 7.85% for 444-day tenure to garner more deposits

With an aim to garner more deposits, IDBI Bank on Tuesday increased its fixed deposit rate to 7.85 per cent for 444-day tenure for a limited period.

The bank now offers a peak rate of 7.85 per cent and 7.75 per cent per annum on tenures of 444 days and 375 days, respectively, IDBI Bank said in a statement.

This enhancement makes the Utsav Fixed Deposit an even more compelling option for customers seeking higher yields, it said.

This offer is valid till September 30, 2024, it said, adding, customers can open an Utsav Fixed Deposit conveniently through the bank's website or mobile banking application or at any branch of the bank.

Besides this, IDBI Bank continues to offer competitive rates on other special tenures under the Utsav Fixed Deposit scheme. The 700-day tenure offers a peak rate of 7.70 per cent, while the 300-day tenure provides 7.55 per cent, it said.

Both Finance Minister and RBI Governor have expressed concern over slow pace in deposit growth as compared to credit growth.

RBI Governor Shaktikanta Das had flagged concerns over household savings moving towards alternative investment avenues and asked banks to mobilise deposits through innovative products and services by leveraging their vast branch network.

"Banks are taking greater recourse to short-term non-retail deposits and other instruments of liability to meet the incremental credit demand. This, as I emphasised elsewhere, may potentially expose the banking system to structural liquidity issues," he had said earlier this month.

On Monday, Finance Minister Nirmala Sitharaman while chairing review meeting with heads of public sector banks had asked them to make concerted efforts to garner deposits by conducting special drives.

Deposits have been growing 300-400 basis points lower than the credit growth in the last few months, creating an asset-liability mismatch for banks.