Bandhan Bank announced on Wednesday a 20 basis points increase in its Fixed Deposit rates for specific tenures. According to reports from Business Standard, The Economic Times, and Mint, the bank is now offering up to 7.95 percent interest rate on FD for the tenure of 2 to less than 3 years. The bank is providing the highest interest rate of 7.95 percent to senior citizen customers, while general customers will earn 7.45 percent for the same tenure. This rate increase comes as banks intensify efforts to mobilise deposits amid widening credit-deposit gaps, with the bank claiming these revised rates are among the more competitive offerings in the banking industry. The move comes as other lenders have been recalibrating deposit offerings despite the Reserve Bank of India maintaining the repo rate at 5.25 percent earlier this month.
Bandhan Bank is offering 7.75 percent interest rate to senior citizens on longer term fixed deposits for the tenure of less than 5 years. As reported by Business Standard, The Economic Times, and Mint, other customers will earn 7.25 percent for the same term deposits. The bank also provides 6.5 percent interest rate on savings account balances above ₹5 lakh to ₹10 lakh. The bank's latest announcement positions it competitively in the market, with the revised rates designed to attract more retail deposits amid heightened competition for funds.
According to the bank's announcement reported by Business Standard, The Economic Times, and Mint, the comprehensive FD rate structure shows 2.95 percent for short-term deposits of 7 days to 14 days and 15 days to 30 days. For medium-term deposits, 3.45 percent is offered for 31 days to less than 2 months, and 4.20 percent for 2 months to less than 3 months. The highest rates of 7.50 percent are available for 1 year deposits, while 7.95 percent is reserved for senior citizens in this category. The bank's revised rates reflect its strategy to attract more deposits during a period when some banks have already revised their deposit rates in June.
The Bandhan Bank FD rate announcement comes after the Reserve Bank of India's decision to maintain key interest rates. As reported by Business Standard, The Economic Times, and Mint, the RBI's six-member Monetary Policy Committee has maintained a status quo on the repo rate at 5.25 percent for a third consecutive time, with the central bank retaining its neutral policy stance amid persistent inflation concerns. Given the pressure of deposit mobilisation, and with the credit-deposit growth gap widening to over 500 basis points, banks are increasingly looking to raise their deposit rates to attract more deposits. Some banks have already revised their deposit rates during June as they seek to attract retail deposits amid heightened competition for funds.
The rate increase reflects broader industry trends as banks compete for deposits. Last week, Bank of Baroda launched the 'bob Golden Goal Deposit Scheme' offering interest rates of up to 7.40 percent per annum on deposits with a tenure of 555 days. Under this scheme, BoB offers 6.75 percent for general public, 7.25 percent for resident senior citizens, and 7.35 percent for resident super senior citizens aged 80 years and above on callable deposits. For non-callable deposits, the rates are 6.80 percent for general public and 7.30 percent for senior citizens. Additionally, Bandhan Bank has increased interest rates on Foreign Currency Non-Resident (Bank) deposits, offering 7.1 percent on US dollar-denominated FCNR(B) deposits of USD 1 million and above for tenures ranging from 3 to 5 years. As per Mint, Rajinder Kumar Babbar, executive director and chief business officer of Bandhan Bank, stated that this offering allows NRI customers to lock in competitive returns while effectively mitigating currency-related risks.
