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IDBI to pay 8.25 per cent on Suvidha deposits

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Our Banking Bureau Mumbai
Industrial Development Bank of India (IDBI Bank) today announced a deposit scheme offering 8.25 per cent, the highest annual return provided by any bank thus far.
 
IDBI Bank said it will pay 8.25 per cent for a 500-day fixed deposit under a new scheme called IDBI 'Suvidha Plus'.
 
The public sector bank expects to initially garner at least Rs 500 crore through this scheme which will be open till September 31, 2006, a senior IDBI official said. ICICI Bank is offering 8 per cent interest per annum for a 390 day deposit.
 
Most public and private banks offer 6.5-7.25 per cent for fixed deposits in the maturity bracket of 365-720 days. IDBI's offers interest rate of 7 per cent for deposits of one year to 18 months.
 
The funds raised from the new deposit scheme will be used for retiring high cost funds and fund working capital requirements of corporates and short-term loans, he said.
 
IDBI has deposits of Rs 31,000 crore, of which Rs 24,000 crore are under various Suvidha fixed deposit schemes.
 
While the minimum amount that could be invested in the new deposit scheme is Rs 10,000, there is no cap on the quantum of funds that can be invested in this scheme.
 
IDBI Bank retired in July Rs 1,500 crore of high cost funds raised earlier through bond issues.
 
These bonds carried 12.5 per cent interest with tenure of seven years.

 
 

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First Published: Aug 17 2006 | 12:00 AM IST

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