State-run Punjab National Bank (PNB) today increased its retail deposit rates by 50-100 basis points. With this, the bank’s peak rate for deposits of less than Rs 10 crore will be 8.50 per cent. The public sector bank, which also increased its benchmark prime lending rate by 75 basis points to 12.50 per cent, said the new rates would be effective from tomorrow.
Earlier this month, the bank increased the deposit rate for corporate bulk deposit. According to an executive at PNB, today’s hike is aimed to address the gap between retail and bulk deposits. “Going forward, we are going to focus more on retail deposits,” he said.
The move by the second-largest public sector lender will make loans more expensive for existing customers, while offering higher returns on fixed deposits at the same time.
To partly offset the impact of the increase in cost of deposits, the bank also raised its benchmark lending rate by 75 basis points.
Term deposits (up to Rs 1 crore) of 15-45 days’ maturity will fetch PNB customers four per cent interest, compared to three per cent at present. At the same time, the interest on fixed deposits with five-eight years’ tenor has been increased by 75 basis points to 8.5 per cent from 7.75 per cent.
