The Hindu Business Line : The next deposit rate hike: Who is going to blink?

Most public sector banks don't intend to take the cue from State Bank of India, which hiked deposit rates late on Friday. Top bankers say they have already increased deposit rates sporadically during the past few months based on their requirements.

It is status quo with regard to interest rates for the time being. How long this truce lasts is anybody's guess. Everyone is waiting for the other banks to blink first.

Mr M.B.N. Rao, Chairman and Managing Director, Canara Bank, said, "We have no immediate plans for any deposit rate hike. If anything, the signal from the RBI is that borrowers should pay more. Since our net interest margin is above 3 per cent, we have the flexibility to absorb some part of the general increase in rates or pass it on."

Mr T.S. Narayanasami, Chairman and Managing Director, Indian Overseas Bank, said, " We'll wait and watch. We are not reacting immediately to SBI's hike. We'll fall in line if others also do it. We have, in the meanwhile, set stiff targets for our branch managers to mobilise more low-cost deposits."

Mr K. Ramakrishnan, Chairman and Managing Director, Andhra Bank, said, "All banks have been adjusting their deposit rates in different maturities for the past six months, based on their asset liability matching requirements as well as demand and supply. So, deposit rates are not going to increase across the board just because of the hikes by SBI."

Dr K.C. Chakrabarty, Chairman and Managing Director, Indian Bank, said, "We anticipated the market and hiked our rates a couple of months ago. After SBI's hike yesterday, their rates are on par. We will wait and see if there are any more hikes. We don't intend to raise rates right now."

Mr K.L. Gopalakrishna, Executive Director, Corporation Bank, said, "The hikes in deposit rates happen routinely based on our asset liability management committee's recommendations. We had increased deposit rates in some maturities just a few weeks ago."

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The next deposit rate hike: Who is going to blink?