Fight for deposits pushes Sept rates up

THE PRESSURE TO garner deposits saw rates inching up in September — the first time since the Reserve Bank of India (RBI) began its rate cut cycle in February.

- KSHIPRA PETKAR

According to RBI’s monthly data, the weighted average rate on fresh rupee term deposits of scheduled commercial banks (SCBs) has inched up by 4 basis points (bps) on month, with rates of public sector banks up by 3 bpswhile private sectorwas up 2 bps.

Analysts believe that with credit growth picking up, deposit rates seemed to have bottomed out. “The rates on fresh deposits seems to have bottomed out unless there are further cuts in repo rates ora slowdown in credit growth,’Anil Gupta,seniorvice presidentand co-group head of financial sectorratings at Icra said.