Ujjivan Small Finance Bank has also raised deposit rate on some buckets in sync with the evolving macro-economic trend.
With tightening liquidity and growth in demand for loans, the scramble for deposits may become more intense.
“It’s a deposit war,” a private sector bank chief executive said recently.
Several lenders from State Bank of India to HDFC raised deposit rates multiple times since April when the Reserve Bank of India started tightening interest rates to rein in inflation.
Bajaj Finance, the lending arm of Bajaj Finserv, has raised fixed deposit rates by up to 25 basis points for tenures between 12 months to 23 months, with effect from November 22. It has even introduced a tenure of 39 months to attract savers.
For a tenure of 44 months, depositors can get up to 7.7% per annum while senior citizens above 60 years can avail interest rate of 7.95% per annum.
Ujjivan said its highest interest rate for regular depositors would be 8% for 80 weeks (560 days) while senior citizens would get 8.75% for the same maturity.
Despite intense competition for deposit mobilisation, deposit growth remained in a single digit while bank credit offtake is growing in the high teens. RBI data as on November 4 showed that deposits have grown 8.2% year-on-year while bank loans accelerated at 17% rate, driven by retail demand as well as higher demand for working capital in a high-inflation market.
For the short-term rates, the weighted average call rate too has increased to 5.98% as of November 4 from 3.34% a year back, reflecting tighter inter-bank liquidity as the central bank withdrawing the excess fund, which was infused to during the pandemic to boost the economy.
“Deposits rates are expected to go up even further due to elevated credit offtake, widening credit deposit gap, festival season, lower liquidity in the market, and inflation,” Care Ratings said earlier in the month.
