Vizag co-op bank hikes interest rates

Visakhapatnam Cooperative Bank (VCB) has hiked its interest rates on deposits by 0.5 per cent to one per cent.

The decision comes in the wake of bank's drive to mop up more deposits, Narasimha Murthy, secretary, VCB, told Business Standard. The bank has targeted to mobilise Rs 40 crore through new deposits this fiscal as against Rs 24 crore during the last fiscal.

He said the cooperative bank would now offer 8 per cent interest on deposits for 5 years. For one year, the rate of interest will be 7.25 per cent, 7.5 per cent for two years and 7.75 per cent for three years. This apart, VCB has announced 0.5 per cent to 1 per cent hike in interest on senior citizens' deposits depending on the term.

However, the interest rates on advances remain unchanged. "For a few more months, we have no plans to increase the interest rates on advances, though it will affect our bottomline marginally," Murthy said.

Currently, the bank charges 11 per cent interest on gold loans and 12 per cent on mortgage loans.

The bank, which has 10 branches in the district, has plans to open more branches across the district after getting the Reserve Bank of India's nod.

"As on March 31, 2006, our total business was Rs 445 crore. Our goal is to reach the Rs 510-crore mark by the end of this fiscal," he added.

Murthy said VCB was negotiating with insurance companies to take up general as well as life insurance business through its branches.