Private sector lender Kotak Mahindra Bank has announced a rise in interest rates of savings deposits. For deposits above Rs 1 lakh, interest offered would now be 6% while for deposits below Rs 1 lakh, interest would stand at 5.50%.

With regulator Reserve Bank of India taking a stand in favor of deregulation of savings bank account rates, all lenders are in a race to raise their respective rates in order to allure more and more customers to themselves and gain greater market presence.

Kotak Mahindra's revised rates are to come to effect from November 01, 2011.

According to MD of the bank, Mr Uday Kotak, the hike in these rates are to effect the total cost of funds of the bank by around 12 bps.

Along with savings bank rates, the bank has also announced a 25 bps hike in lending rates too.