Bank of Baroda is an Indian state-owned international banking and financial services company | Photo: Shutterstock
After State Bank of India hiked deposit rates by 50 basis points (bps), another public sector lender, Bank of Baroda, has hiked domestic retail term deposit rates by up to 125 basis points across different maturity buckets. The revised rates will come into effect from December 29, 2023.
The new rates will apply to domestic deposits below Rs two crore, including non-resident Indian ordinary (NRO), BOB said in a statement.
BoB said the rate hike is largely focused on shorter-term maturities, especially those of less than one year. Increasing shorter-term interest rates will not only bring major benefits to depositors holding deposits for shorter terms, but will also contribute to the Bank's objective of balancing and optimizing the total cost of deposits and its net interest margin (NIM). This was also in line with the Bank's strategy to increase its share of short-term retail term deposits.
Ravindra Singh Negi, Chief General Manager – Retail Liabilities & NRI Business, BOB said, “We believe this move will not only attract more customers as they earn more from their savings, but also help the Bank optimize its deposit costs, thereby improving our NIM.'
First print: December 28, 2023 | 9:34 PM IST