Interest rates happen to be touchpoints for customers. Every customer is sensitive to interest rate change and his decisions are governed to a big extent by the interest rate factor.

With savings bank account rates getting deregularized recently, some private sector lenders have taken to increasing their respective offerings in this segment with consideration to the interest rate sensitivity of the customer. They feel that higher interest rates are definitely going to attract customers.

However public sector lenders as well as many other private peers have still continued to stick to the 4% interest rate.

"Customers are sensitive to interest rates. For a customer, besides product feature and availability, interest rate plays a key role in his decision-making matrix. Though it is still early days, what we are seeing is that customers are showing a tendency to consolidate their money in the above Rs 1 lakh slab where we are offering six per cent interest," said Mr K.V.S. Manian, President (Consumer Banking), Kotak Mahindra Bank.

The bank has raised its savings bank account rates to 6% for deposits above Rs 1 lakh and 5.50% for deposits below that.

"New customer inquiries are coming in from both individual customers and corporates for their salary/payroll accounts. It will, however, take longer time to assess the full impact (of higher SB interest rate) as this plays out in the market place.

"Early action is being noticed from rate sensitive segments like the retired and semi-urban and rural markets," said Mr. Nitin Chopra, Head (Retail and Consumer Banking), Ratnakar Bank, which has also raised its interest rates in this segment.