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Private sector lender Lakshmi Vilas Bank has increased its savings bank interest rate to five per cent for accounts with a balance of Rs 1 lakh and above.
“An increased rate of five per cent will be offered to all customers on the entire balance in accounts, maintaining a deposit balance of Rs 1 lakh and above, calculated on a daily basis,” the bank said in an official statement issued here on Monday.
The bank earlier used to offer an interest rate of four per cent on deposits in savings accounts.
In late 2011, the Reserve Bank of India (RBI) had deregulated interest rates on savings deposits, after raising the minimum interest rate by 0.50 per cent to four per cent.
According to a prospectus filed in July 2014 for a rights issue, the bank had total deposits of Rs 18,572 crore at the end of March 2014, up from Rs 15,618 crore a year ago. The share of low cost current account and savings accounts (CASA) was 14.22 per cent, down from 14.48 per cent at the end of March 2013. As of March 31, 2014 , 32,451 accounts contributed to 70 per cent of CASA.
While the total of low cost deposits has grown from Rs 1,649 crore in March 2010 to Rs 2,640 crore in March 2014, the share in total deposit came down from 18.17 per cent (in March 2010) to 14.22 per cent in March 2014.
In its annual report, the bank had mentioned that, “thrust and focus shall be given for achieving the CASA quantum in the whole period of FY15”.
After RBI had deregulated the rates, only two lenders — YES Bank and Kotak Mahindra Bank had hiked interest rates.
At present, YES Bank offers an interest rate of up to seven per cent on such deposits for above Rs 1 lakh and six per cent below that amount, while Kotak Mahindra Bank pays a flat six per cent on all deposits.
However, none of the state-run lenders, which handle over three-fourths of the banking system, have reviewed rates.
