Luring depositors

With reference to the article ‘Tight liquidity, SBI rate hike seen setting off race among banks for deposits’ (May 17), the maximum increase of 75 bps is restricted to the time bucket of 46-179 days and the increase is 25 bps only in the other time buckets up to one year.

The bank has not increased its maximum deposit rate of 7 per cent in the larger tenure deposits, which account for the maximum share of the bank’s retail term deposits. The bank, like all the other major players in the market, has not effected any revision in the savings bank interest rates.

The move to increase the interest rates in the short term buckets should be seen as a strategy to lure depositors of SFBs and a few private sector universal banks.

Since the concentration of lending is loaded in favour of high yielding personal advances including unsecured, credit card outstanding and auto loans, the net interest margin (NIM) is unlikely to come down (actually may marginally go up) due to this increase.

V Viswanathan

Coimbatore

Welcome rate hikes

It is comforting to see that SBI is passing its gains on Net Interest Margins (NIMs) to depositors. Perhaps, Indian banks have been enjoying high NIMs for a pretty long time, despite the losses incurred on NPAs in the past.

Still, as of now, there is a case for a relook on the entire interest rates structure for considering better differential rates for priority sector loans and decent returns on deposits.

MG Warrier

Mumbai

Remarkable career

It refers to ‘Vineet Nayyar, a true renaissance man’.

Without doubt Nayyar was a larger than life figure in the Indian business landscape.

An eminent civil servant, who also served the World Bank and GAIL and later started his journey into the private sector with HCL and then Mahindra British Telecom, which is now Tech Mahindra.

Satyam’s acquisition was successfully spearheaded by Nayyar.

He played his part in establishing Mahindra University at the old Satyam campus. His philanthropic work will also be remembered.

Bal Govind

Noida

Market volatility

With reference to ‘Needless jitters’ ( May 17), the dependence on the volatility index in the Indian markets to predict the poll outcome is insignificant since market movements have always been calibrated according to the tunes of global issues and the Fed. Also, the parameters involved in the composition of VIX analytics are based on the trade movements of Nifty50 stocks which may not be accurate since it subsumes only prevailing market cap of underlying stocks and not supported by fundamental analysis.

Sitaram Popuri

Bengaluru

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