In reaction to the much talked about repo rate hike by the RBI, Hyderabad-based Andhra Bank hinted that it might increase it deposit rate by 50 basis points. However, there has not been any official announcement about the hike, but the CMD of Andhra Bank has said that the bank is contemplating to hike the interest rate in domestic term deposits.
"We will take the final call on interest rates on deposits today itself, as the real interest has become almost negative in the wake of a high inflationary pressure. We would increase the deposit rates possibly by 50 basis points," said K Ramakrishnan, chairman and managing director, Andhra Bank.
Ramakrishnan, reiterating the importance of price stability, said that it is one of the key to a sustainable economic growth. He also felt that the regulator have to take the necessary measures.
"Containing inflation at a moderate level is a key to a sustainable economic growth and the regulator should play its role. Subsequently, all the banks have a role to play in channelising the flow of credit in the desirable sectors," he added.
In addition to this, the Hyderabad based bank is also targeting overseas banking and planning to raise $120 million as overseas borrowing in the next couple of weeks.
Confirming this news and talking about the capital raising plans for the current fiscal, Ramakrishnan said, "There is a headroom for raising about $300 million through this route but for the time being we will raise $120 million."