RBL Bank, a private lender, raised the interest rate on savings deposits in selected buckets by up to 150 basis points, effective August 21, 2023. For daily balances of Rs 25 lakh to Rs 2 crore, the bank will pay 7.5 per cent (per annum) as opposed to 7.0 per cent.
It cut the rate by 50 basis points to 6.5 per cent for daily balances ranging from Rs 3.0 crore to Rs 7.5 crore. According to bank data, it increased the savings rate by 150 basis points to 6.75 per cent for balances above Rs 400 crore.
This change comes after the banks face liquidity challenges following the Reserve Bank of India’s imposition of a 10 per cent incremental Cash Reserve Ratio (I-CRR) on increases in net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023. This completely temporary policy was designed to absorb excess liquidity caused by a variety of circumstances, including the return of Rs 2000 notes to the banking system.
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This follows the Reserve Bank of India’s (RBI) decision to maintain the repo rate at 6.5 per cent for the third time in a row. On August 10, RBI Governor Shaktikanta Das indicated that the policy interest rate would remain unchanged.
