The Hindu Business Line : Canara Bank hikes deposit rates

A bank release said that the interest on 15 to 45 day deposits was now 4.75 per cent up from 4.5 per cent. For five-year deposits, the rates offered are 7 per cent up from 6.5 per cent. The hike in deposit rates follows the sharp rise in credit off-take. The rate hikes take effect from March 6 onwards, the release added.

The bank's credit offtake has been growing upwards of 20 per cent on a year- on-year basis. In fact, the banking sector has been operating at a very high credit-deposit ratio of 71 per cent. It is to sustain this level of credit offtake that the banks are now moving to augmenting funds, particularly middle-end and long-term funds.

Besides, for long-term funds, of five years and above, the Finance Minister has also extended tax concessions under Section 80 c of the Income Tax Act, though this is likely to become effective only from the next financial year onwards.

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