Public sector banks may approach the Finance Ministry with an appeal to give them more time to abide by the ministry's directive pertaining to reduction in bulk deposits.
On the matter, a banking source said, "Some of the public sector banks are likely to approach the Finance Ministry to seek more time for complying with the norm to reduce bulk deposits to 15 per cent of total deposits." The source further added that banks having large bulk deposits cannot curtail it to 15 percent so quickly at this time when the rate of mobilization of deposits is slow.
Recently, the finance ministry had issued a directive to the public sector banks asking them to limit the bulk deposits to 15 percent of their total deposits.
At present, PSBs like Indian Overseas Bank, Punjab and Sind Bank and Corporation Bank have bulk deposits accounting for more than 15 percent of their total deposits. As a step towards mobilizing the deposits, PSBs like Central Bank of India and Bank of Baroda have increased the interest rates on long term fixed deposits.