Banks will increase interest rates on deposits

With bank credit picking up and interest rates for other savings schemes increased by the government, commercial banks will increase the interest rates on deposits, Reserve Bank of India (RBI) Governor Shaktikanta Das said.

Queried about banks passing on the interest rate hikes to their borrowers while not increasing their deposit rates, he said that the bank credit is picking up and they will be needing funds.

There is adequate liquidity available in the system, about Rs 5 lakh crore, he said.

The Centre has hiked interest rate for senior citizen savings scheme to 7.6 per cent and for Kisan Vikas Patra to 7 per cent.

Similarly the two- and three-year time deposit with post offices have been increased to 5.8 per cent and 5.7 per cent.