Banks reduce bulk deposit rates
April 3rd, 2009
Faced with mounting pressure to reduce lending rates and to counter slack credit offtake, banks have begun driving down bulk deposit rates.
Rates on Certificates of Deposits dipped by 100 basis points in one week. On April 1, two banks — Punjab National Bank and the Canara Bank — raised funds through 12-month CD floats at yields of 7 per cent. The banks mopped up Rs 1,200 crore in just one day.
Last weekend, public sector banks (PSBs) had raised 12-month CD funds at rates as high as 8 per cent.