New Delhi: There is a good news for the investor, interest rates on bank fixed deposits (FD), recurring deposits (RD) and savings account deposits is expected to increase.
As per the India Ratings and Research (Ind-Ra) report, the competition for deposits could intensify as five PSBs have recently come out of RBI’s Prompt Corrective Action (PCA) framework and some of them are likely to look to grow their balance sheets and the private sector banks seeing continuing strong credit growth at 22 per cent year-on-year in third-quarter of FY19, they are likely to solicit deposits even by offering higher rates.
According to the Reserve Bank of India (RBI) deposits and credit statistics of scheduled commercial banks as on December 2018.The year-on-year growth in the credit of 12.9 per cent has outperformed the growth rate of 9.3 per cent in deposits.
India Ratings and Research said, with the aforementioned rates for credit growth and deposits growth, the competition for deposits among the banks is set to intensify,
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India Ratings further said that Public Sector Banks (PSBs), with credit growth of 8.4 per cent and deposit growth of 4.9 per cent in the Oct-Dec quarter of FY19, are likely to compete to recoup the market share loss in the deposit to private sector banks over the years.
