With the liquidity in the system gradually drying up, banks may jack up deposit rates to mobilise funds.United Bank of India has already hiked its deposit rates by 25-50 basis points effective Wednesday, while the other Kolkata-based banks are planning to adopt a ‘wait and watch' approach for now.United Bank of India has increased interest rates on domestic retail term deposits, below Rs 1 crore by 25 basis points to 6.75 per cent per annum from 6.50 per cent a year in the time bucket of one year-to-less than two years.For the five years and above, the interest rates have been increased to 7.50 per cent from 7.25 per cent at present.
UCO Bank might not go for an immediate hike in interest rates, according to its Chairman and Managing Director, Mr S K Goel. “Deposit rates are primarily market-driven. We are watching the situation and will take a call on it at our ALCO (Asset Liability Committee) meeting likely to be held on June 30,” Mr Goel told Business Line.“We are currently comfortable on the liquidity position, but going forward we have to see how the credit picks up. Our ALCO will take a call on this soon,” said Mr J.P. Dua, CMD, Allahabad Bank.
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