Recently, during a meeting with RBI officials, Finance Minister Nirmala Sitharaman expressed worry about the falling bank deposits.
She urged banks to create appealing schemes to boost deposits and to lend only to those who genuinely need loans.
Following this directive, banks are now focusing on increasing deposits.
This could lead to higher loan costs and the introduction of new fixed deposit schemes with attractive interest rates.
Loan Growth Outpaces Deposit Growth
RBI data reveals that loan growth in the banking sector is at about 13.7 percent annually, while deposit growth is only 10.6 percent.
This imbalance has been a concern for some time.
Recently, several smaller banks, including RBL Bank, Bank of Maharashtra, Federal Bank, and Tamilnad Mercantile Bank, have introduced special fixed deposit (FD) schemes to attract more deposits.
New Fixed Deposit Schemes
Federal Bank has launched various FD schemes:
- 7.35 percent interest for 400 days,
- 7.40 percent for 777 days,
- Special schemes with 50 months duration.
Senior citizens will receive an extra 0.50 percent interest on these schemes.
Deposits over Rs 1 crore for 400 days will earn 7.50 percent,
while those for 777 days and 50 months will earn 7.55 percent.
RBL Bank Scheme
RBL Bank has introduced the Vijay Deposit Scheme, offering
- 8.10 percent interest for 500 days,
- 8.60 percent interest for senior citizens.
And many more.
Larger Banks Increasing FD Rates
Bank of Maharashtra has announced a 7.25 percent interest rate on 777-day deposits.
Tamilnad Mercantile Bank is offering 7.50 percent interest for 400-day deposits.
Bandhan Bank has introduced a special FD scheme with 8 percent interest for 21 months.
Additionally, major banks like HDFC Bank, State Bank of India, and Bank of Baroda have also started special FD schemes to attract more deposits.
