Within a week of the Reserve Bank hiking its key rates, private sector lender Kotak Mahindra Bank (KBM) today increased interest rates on its term deposits by 0.25 per cent.
The hike in the rate is applicable to deposits having maturity of over a year and is with immediate effect, the bank said in a release.
In order to check inflationary concerns, the RBI had on September 16 raised its short-term lending rate (the repo rate) by 0.25 per cent to 6 per cent and borrowing rate (reverse repo) by 0.50 per cent to 5 per cent.
After the hike, bankers had opined there will be an increase in deposit rates in the near-term which will in turn create pressure to hike lending rates as well.
KMB is the first lender to upwardly revise its deposit rates since the RBI's mid-quarter review last week.
Under the revised rate structure, deposits having a maturity of over one year but till 389 days will fetch an interest of 7.25 per cent per annum while those between five years and ten years attract an interest of 7.75 per cent, the release said.
