Centurion ups deposit rates

Centurion Bank of Punjab has raised interest rate on the domestic term deposits by 25-100 basis points in various maturities.

The hike in interest rate is a steep 100 basis points for deposits with maturity of five years and above. The new rate for this bucket is eight per cent per annum with an effective yield at 9.72 per cent.

"The hardening of rates in the market has triggered the move. Our rates were lower than those offered by fellow banks. The new rates for three to five years maturity is 7.5 per cent ( seven per cent being old rate)," bank's managing director Shailendra Bhandari said today.

The rates for term deposits up to 30 days maturity remain unchanged. The deposits in 31-45 days would attract 4.75 per cent rate (4.25 per cent). For deposits in 91-180 day maturity, the rate is 5.75 per cent (5.5 per cent).

Explaining the rationale for 100 basis points hike in rate for five year and above deposit category, Bhandari said the bank faces competition from the post office deposits so it has to offer attractive rate.

The stable deposit base from this bucket (five year and above bucket) helps in garnering funds to lend for assets (like home loans) whose repayments are spread over long term.

The bank would continue to have substantial share of low cost deposits - current account and saving accounts (CASA). At present, CASA's has 38 per cent share in the total deposit base. The total deposits stood at Rs 9,500 crore at the end of March 2006.

The last revision in term deposits rates was made in March 2006. It had raised term deposit rates by 25-50 basis points across various maturities.