Oriental Bank of Commerce (OBC) has reduced deposit rates by 10-50 basis points across several time buckets upto five years.
The bank has also hiked interest rates on deposits with maturities of 5-10 years, in a bid to attract long-term money for the bank. The rate hike is by10-25 basis points.
The rate adjustment, which will be effective from Monday, will cover term deposits of less than Rs 15 lakh, Rs 15 lakh and above but less than Rs 1 crore and also deposits of Rs 1 crore and above.
This move comes close on the heels of the bank reducing deposit rates by 25-100 basis points under various maturities below one year.
The latest deposit rate changes will prepare the ground for further reduction in base rate, S.L.Bansal, the bank’s Chairman and Managing Director, told Business Line .
Asked whether the bank was following SBI, which had recently slashed domestic term deposits by upto 100 basis points, Bansal replied in the negative.
“We are not guided by SBI”, he said, adding that Oriental Bank’s cost structures were different. The is able to ride on lower cost because of operational efficiencies at the branch level.
After the latest deposit rate reduction, the bank will quote 9.10 per cent interest on 1-year deposits, irrespective of the amount of deposit.
The significant fall in 1-year term deposit rates can be gauged from the fact that the bank offered 9.75 per cent interest on such deposits in April.
The bank’s rates are higher than those offered by both State Bank of India and Punjab National Bank for 1-year deposits.