More and more banks are joining the fray for bulk deposits, with the result that interest rates are not coming off their peak levels. The need for the bulk deposits is felt by banks on the back of the recent CRR hike announced by RBI and call money rates tightening since mid-December.
The rate of interest on a 91-day bulk deposit ranges anywhere between 9.25% and 9.60% while that on a one-year deposit ranges between 9.25% and 9.40%. Delhi-based public sector units have been making the most of this situation by floating bids for bulk deposits.
Other than a couple of large private sector banks like ICICI Bank, a host of other large public sector players have joined the bandwagon. These include State Bank of India, Punjab National Bank, Union Bank of India, Canara Bank and Vijaya Bank.
These banks are currently offering up to 9% interest rates on short term deposits, whose duration would span the month of March. State Bank of India (SBI) is offering 8.25% interest on all deposits till March 31, 2007, irrespective of their size.
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