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Urban co-operative banks could be spurred into action as the country's largest co-operative bank, the Saraswat Co-operative Bank, has taken the lead in announcing a hike in savings bank deposit rate from 4 per cent to 6 per cent.
The effective annualised interest rate for Saraswat Bank's SB depositors will work out to 6.14 per cent as interest will be credited at quarterly intervals.
Irrespective of the deposit amount, the UCB will pay 6 per cent interest on all SB deposits with effect from December 1. The bank may revise the interest rate on SB deposits once in six months.
The increase in interest rate on SB deposits by the co-operative bank comes in the wake of Reserve Bank of India's notification (on November 25) allowing UCBs the freedom to set the interest rate on SB deposits.
On October 25, the central bank had deregulated savings bank deposit interest rate for all commercial banks.
For a better deal
“In the current rising inflation rate environment, bank depositors are getting a raw deal. Hence, we decided to increase the interest rate on SB deposits. Our intention is not to wean away customers from other banks but to give a better deal to our existing customers,” said Mr Eknath K. Thakur, Chairman, Saraswat Co-operative Bank.
According to Dr Vinayak Y. Tarale, Secretary, Maharashtra State Co-operative Banks' Association, following the increase in SB deposit rate by Saraswat Bank, other urban co-operative banks may not have much choice but to follow suit.
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