Private sector lender Kotak Mahindra Bank hiked interest rates on its term deposits for various maturities on Monday.
Giving the details on the hike in term deposit rates the K V S Manian, Group Head - Retail Liabilities and Branch banking said, "This hike in interest rates would benefit the retail customers given the current volatile market situation."
He added that from this hike the customers will be able to earn retail term deposit rates of 8.50 per cent pa for term deposits of 271 days to less than one year and 9.25 per cent pa for one year to less than five years.
On the hike in term deposit rates, K V S Manian, Group Head - Retail Liabilities and Branch banking, said, "This hike in interest rates would benefit the retail customers given the current volatile market situation."
Wednesday, April 30, 2008
Saturday, April 19, 2008
Volume of fixed deposits hVolume of fixed deposits have shrunkave shrunk
Recently there was news that RBI is not comfortable with Non Banking Finance Companies (NBFCs) since 1998. When NBFCs faced crisis the RBI was given a role of protector of public deposits which RBI did not want to be. During that time the apex bank had tightened regulatory norms for NBFCs and tried to limit access to fixed deposits window by introducing ratings and fixing the limits to such borrowings. And over the last decade these efforts has given good results.
Since then there has been fall down in the number of such deposit taking entities. Its have been more than five years, the entities have come down by half to about 401 as of March 2007. As of March 2007 even the volume of such deposits has also reduced from a little over Rs 5,000 crore to about Rs 2,000 crore. Due to these conditions the RBI has now planned to limit the public deposits window to banks alone.
Reacting to RBI’s plan of limiting the public deposits window to banks alone, a senior NBFC industry official said, “The Fixed Deposit as an instrument is dead. There was a time when it was very popular with retirees and those approaching superannuation. Now even if the Reserve Bank of India were to allow free access to such deposits, there won’t be too many takers. The stock market boom over the past few years, the dominance of mutual funds and ULIPs has almost eliminated this investment option.”
Will anyone be affected by this move of RBI comes through? NBFC industry officials believe that few small NBFCs will see rise in intermediation costs.
They will be helpless and have no other option but to approach banks who may charge higher rates. Some of the industry insiders feel that most of the companies have already diversified their funding sources so they will not face much problem.
Since then there has been fall down in the number of such deposit taking entities. Its have been more than five years, the entities have come down by half to about 401 as of March 2007. As of March 2007 even the volume of such deposits has also reduced from a little over Rs 5,000 crore to about Rs 2,000 crore. Due to these conditions the RBI has now planned to limit the public deposits window to banks alone.
Reacting to RBI’s plan of limiting the public deposits window to banks alone, a senior NBFC industry official said, “The Fixed Deposit as an instrument is dead. There was a time when it was very popular with retirees and those approaching superannuation. Now even if the Reserve Bank of India were to allow free access to such deposits, there won’t be too many takers. The stock market boom over the past few years, the dominance of mutual funds and ULIPs has almost eliminated this investment option.”
Will anyone be affected by this move of RBI comes through? NBFC industry officials believe that few small NBFCs will see rise in intermediation costs.
They will be helpless and have no other option but to approach banks who may charge higher rates. Some of the industry insiders feel that most of the companies have already diversified their funding sources so they will not face much problem.
Thursday, April 3, 2008
Bank of Baroda revised interest rates for FCNR (B)
Public-sector lender Bank of Baroda has revised interest rates its term deposits in foreign currency by Non Resident Indians (NRIs) segment. The deposits having different maturity period carry different interest rates.
A press release of the bank stated for the revised rate for Foreign Currency Non-Resident (Banks) deposits (FCNR (B)) and Non Resident External (NRE) term deposits in dollar, having a maturity period of 1-2 years, has been fixed at 1.74 per cent (1.96).
The bank said, while the deposits in Pound, Euro and Yen having the same maturity, the revised rates will be 5.09 per cent (4.81), 3.98 per cent (3.64) and 0.35 per cent (0.35), respectively.
The revised rates for the deposits having tenure of 2-3 years, 3-4 years, 4-5 years and five years in US dollar, are 1.75 per cent (1.87), 2.06 per cent (2.19), 2.36 per cent (2.48) and 2.65 per cent (2.74), the bank said.
Similarly, NRE deposits having a maturity period of 1-2 years, the rate has been revised to 2.49 per cent (2.71) while for 2-3 years and 3-4 years, the new rates are 2.50 per cent (2.62), 2.81 per cent (2.94) respectively.
A press release of the bank stated for the revised rate for Foreign Currency Non-Resident (Banks) deposits (FCNR (B)) and Non Resident External (NRE) term deposits in dollar, having a maturity period of 1-2 years, has been fixed at 1.74 per cent (1.96).
The bank said, while the deposits in Pound, Euro and Yen having the same maturity, the revised rates will be 5.09 per cent (4.81), 3.98 per cent (3.64) and 0.35 per cent (0.35), respectively.
The revised rates for the deposits having tenure of 2-3 years, 3-4 years, 4-5 years and five years in US dollar, are 1.75 per cent (1.87), 2.06 per cent (2.19), 2.36 per cent (2.48) and 2.65 per cent (2.74), the bank said.
Similarly, NRE deposits having a maturity period of 1-2 years, the rate has been revised to 2.49 per cent (2.71) while for 2-3 years and 3-4 years, the new rates are 2.50 per cent (2.62), 2.81 per cent (2.94) respectively.
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