reserve Bank of India (Reserve Bank of India) Of course, there was no change in the repo rate on Thursday. But due to the changing economic scenario, FD interest rates will continue to rise. The reason for this is that loan growth remains at a high level. At the same time, deposit growth continues to remain low. In such a situation, banks will keep increasing interest rates to attract deposits.
Experts say that more interest can be seen in short term fixed deposits as compared to long term FDs. In recent times, the interest rates on FDs of 200 to 300 days have been increased by some banks like Axis Bank, Punjab National Bank, HDFC Bank and IndusInd Bank.
Interest may go up
Speaking to CNBC TV 18, SBI MD Ashwini Kumar Tiwari said that deposit growth is going up rapidly. The reason for this is that loan growth has been more than deposit growth for several quarters. Deposit rates are under pressure due to higher loan growth and money moving towards the stock market and mutual funds. However, the function of monetary policy here is not so much about the demand for loans and what investment options people have, but because of this the interest rates on deposits can go up.
Apart from the increase in repo rate, the ratio of loan growth to deposit growth plays a big role in increasing interest rates anytime. In such a situation, when loan growth exceeds deposit growth, banks have to increase interest rates on deposits to attract new deposits.
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