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PSBs put the upper limit of 7.5 percent on 1-yr bulk deposit

Neha Dhamija


Banks have lowered the interest rates on bulk deposits together with fixing the maximum rate for one-year maturity at 7.5%. The value has already seen a decrease from 9.5% to 8.5%, on January 1. Some of the banks like PNB are offering just 7% on these deposits.


Though generally, the bulk depositors get a higher interest rate than retail depositors but in the present scenario, case is just the reverse. The retail deposit rate exceeds that of bulk deposits by about 100 basis points; with the value for former being 8.5-9%, as offered by PSBs.


Deposits exceeding Rs. 1 crore are classified as ‘Bulk deposits’. These are usually deposited by corporate houses when they possess surplus funds The lowering of bulk deposit rates is due to enough liquidity in the system, which has diluted the position held by these deposits for banks. Refinance from RBI is available at 5.5%. Also, yet another option is arranging for funds via the 90-day commercial paper route , for a period of three months, at 7%. SBI provides interest at rate 9% for 1000 day deposits and 9.5% for senior citizens.

 
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