Dip in fixed deposit rates expected
By Neelima Shankar
Apr 7, 2011
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It is expected that the interest rates of fixed deposits is going to see a dip. The reason for the same has been cited as improvement in liquidity conditions of the economy and lack of rise in credit demand.

Two lenders namely, Central Bank of India and Oriental Bank of Commerce have announced dip in their rates by as much as 100 basis points.

Speaking on the liquidity condition, Bank of Baroda Chairman and Managing Director MD Mallya said, "I think the deposit rates may come down. As far as lending rates are concerned, we will have to wait for the RBI policy before taking a call on it."

"Generally during the first half of the fiscal the credit demand is leaner and we are also seeing an easing of the liquidity situation. This, along with the fact, that towards the fiscal-end and April banks have incremental capital may be the reason for cut in rates," StanChart Head of Research Samiran Chakrabarty said.

Crisil chief economist DK Joshi said: "We do not think the rate slash will continue on a sustained basis. No doubt there is an easing of the liquidity but inflationary pressure is still there."


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