Bank may Increase Deposit Rates By up to 1.50% in Next 6 Months

Bank May Increase Deposit Rates By up to 1.50% in Next 6 Months. Banks will be compelled to do so. In fact, dua to the measures of the Reserve Bank to reduce inflation, the Cash in the bank is Decreasing. On the other hand, deposite growth is lower then creadit offtake. In such a situation, banks have started using the surplus deposited in the regulatory buffer to meet the increased demand for loans.

Till September, there was a 16.7% increase in non-food creadit of banks, ie loans taken for non-food Purposes. On the other hand, deposit growth was only 9.5% . Now the demand for loans is increasing during festivals. officials of some big banks said, many banks have the amount of statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) in suplus. Some banks have started using it to meet the loan demand.

Cash Suplus of Banks decreased by 65% Since May

Since May till now, banks have largely passed the burden of increasing thr Repo Rate on the customers. But barring a few festive offers, deposit rates have not gone up so fast. But between august and september 28, The cash surplus in the banking system declined by 65% to Rs 2.3 lakh crore, from Rs 3.8 lakh crore in June-July.

The Effect of Increasing The Rates of Small Saving schemes will be Visilbe

The Government has increased interest rates on small saving schemes by up to 0.30% for the December quarter. Bank officials said that now if banks do not increase their deposit rates, then people will start depositing money in small savings schemes of the post office. In such a situation, it will be difficult for banks to raise enough cash.