Asia Bizz: Bank of Baroda (BoB) increased fixed deposit rates of select maturities by up to 0.25 percentage points on March 19, 2012. The move has been taken amidst the talks of a possible cut in lending rates of the bank.
BoB has become the first bank in India to revise the short-term fixed deposit rates after Reserve Bank of India (RBI) reduced the Cash Reserve Ratio (CRR) earlier this month. The bank, in a statement, said that deposits worth less than Rs 1 crores with a maturity period of 7 to 14 days will earn 5 percent interest against 4.75 percent earlier.
Even the interest rates on the 15-45 days and 46-90 days fixed deposits have been raised by 0.25 percent points to 5 percent, while those on 181-270 days term deposits have been increased from 7.60 percent to 7.75 percent and it will be effective from March 19, 2012.
The term deposits between 271 days- 1 year will earn 8 percent compared to the earlier 7.75 percent. At the same time, the interest rates for the fixed deposits with duration beyond one year have been left unchanged. The analysts have opined that the short-term rate hike is mainly due to the tight liquidity situation. The Cash Reserve Ratio was reduced by the RBI, which is the portion that the bank needs to keep with the central bank.