Mid-tier banks boost fixed deposit rates to 8.50%

MUMBAI: Borrowing a leaf from their larger peers who have been wooing depositors with attractive pricing for medium-term fixed deposits of up to 7.30% return per annum, several mid-tier banks are now doing the same offering as much as 8.50% at the peak and over average 20-30 bps more than the larger banks.

Mid-sized banks, which have launched special deposit drive include RBL Bank, Bank of Maharashtra, Federal Bank, Bandhan Bank, and Tamilnad Mercantile Bank among others to increase in deposits.

Continuing slower growth of deposit mobilisation for more than two months had the regulator Reserve Bank and even the North Block mandarins getting worried about asset liability mismatch. People were pulling out money from banks and parking them in equities and mutual funds and even derivatives since the pandemic-induced crash in March 2020 and the subsequent recovery from June of that year. Since then the stock market and mutual funds have been giving much higher returns on their money.