Banks not in a hurry to hike interest rates on deposits despite price rise

Year-on-year growth in deposits till early June 2021 has been 9.7 per cent while credit growth is only 5.7 per cent.

With abundant liquidity and tepid credit demand amid lockdowns, banks are not in a hurry to hike interest rates on deposits despite the price rise. The crucial factor will be the government’s decision on small savings instruments (SSIs) by the end of the month for any revision, especially by public sector banks.

In April, rates on SSIs were slashed by 50-100 basis points for the first quarter (Q1Fy22) but the government rolled back the decision amid the Assembly elections in four states.

A S Rajeev, MD and CEO, Bank of Maharashtra, said the bank had seen 4-5 per cent growth in savings