Banks
may soon be withdrawing fixed deposits that offer a grand
8 - 8.5 per cent. CNBC-TV18 reports that most bankers
believe that rates aren't going to rise any further.
Speaking
at a seminar organised by the Federation of Indian Chambers
of Commerce & Industry, O P Bhatt, chairman, State
Bank of India, said, that he sees rates softening, and
then moderated his statement saying he would rather give
his views after the second quarter results and the monetary
policy review.
However,
many bond dealers believe that Bhatt was right in sensing
that interest rates have definitely peaked. Bhat had said,
"Looking at the falling crude prices and the slowdown
in the US economy, clearly there is a softening."
So
what does this mean for the small borrower and depositor?
It is likely that banks will end their high return deposit
products like ICICI's 8 per cent for 390 days and IDBI
Bank's 8.25 per cent for 500-day deposits.
Officially, the retail heads of these banks could not
be reached for confirmation. But highly placed officials
said that the banks are mulling such a move.
On
the other hand, PSU bankers were happy that despite severe
pressure from their branches they resisted the move to
compete with these high cost deposits.
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