Banks lift deposit rates as liquidity tightens
In short
Banks have started raising deposit rates after the RBI’s rate hike. Bank of India is the latest lender to do this, including on a special 500-day deposit option. The move comes as banking-system liquidity has fallen from its early-September peak.
This matters because higher deposit rates can lift banks’ funding costs. The source does not say how much more rates may rise or which other banks will follow.
What the reporting says
Banks are raising deposit rates after the RBI’s rate hike, with Bank of India the latest to move as liquidity shrinks in the banking system. The publisher-supplied summary says banks are reacting to higher deposit costs and rising credit demand, and notes liquidity has fallen sharply from its early-September peak. The immediate impact is higher funding costs for banks, while the pace of further hikes is not stated.
Why it matters
Banks are beginning to raise deposit rates after the RBI’s rate hike, and Bank of India has announced higher rates on several maturities, including a special 500-day option. The summary links the move to shrinking liquidity and rising demand for credit, which is pushing up the cost of deposits in the banking system. The reporting does not say how many banks will follow or how much rates will increase.