Bank of India announced higher returns on selected term deposits from Nov. 2, as Reserve Bank of India data showed the central bank absorbing less liquidity through its daily operations than in early September.
The bank’s announcement set the annual rate on deposits below ₹3 crore for one year at 6.60%, up from 6.50%. Its 500-day deposit pays 6.85% to general customers, 7.35% to senior citizens and 7.50% to super senior citizens. Those rates raise stated returns for customers choosing the specified terms and add to the bank’s deposit costs.
The Reserve Bank of India’s daily operations data recorded net liquidity absorption of ₹1.96 trillion on Nov. 1, compared with ₹11.16 trillion on Sept. 6. The readings track the central bank’s net lending and absorption operations; they do not establish a liquidity deficit across the banking system. The RBI separately reported a ₹7.93 trillion surplus in net durable liquidity as of Oct. 15, a different measure.
The RBI’s Monetary Policy Committee increased the repo rate by 25 basis points to 5.50% at its Oct. 7 meeting and described its policy stance as calibrated tightening. Its next meeting is scheduled for Dec. 2-4.
Indian Bank’s special 555-day and 777-day deposits began paying 15 basis points more each on Oct. 23. The 555-day Ind Grow rate is 6.80%, while the 777-day Ind Prosper rate is 6.75%. EconoTimes previously covered Indian Bank’s increase to its special deposit rates.
The Economic Times reported that a senior Bank of India executive cited higher deposit costs and rising bulk-deposit rates in discussing the adjustment to the bank’s liability profile. The executive also said the benefit from FCNR(B) inflows was waning. The RBI’s next policy meeting, scheduled for Dec. 2-4, is the next stated central bank decision on the calendar.
