As
banks race for deposits, they are probably being taken
for a ride by corporates.
Bankers
believe some corporates may be borrowing at lower rates
from them against their cash credit limits and then depositing
them with other banks in the form of a bulk deposits at
a higher rate that earns them a cool 1 per cent. CNBC-TV18
reports.
Companies
have cash credit limits with banks, the rates of which
are benchmarked to PLR or to G-secs, with reset clauses.
Now deposit rates change by the day, especially towards
March, as banks are keen to boost their balance sheets.
To
understand this with the help of an example; suppose a
company, A Ltd, has Rs20 crore an unutilised cash credit
limit with X Bank. A Ltd takes out a three-month loan
at 9.5 per cent from X Bank, which costs him Rs47.5 lakh.
A
Ltd then deposits this with a MF on a Fixed Maturity Plan,
FMP, which parks with Y Bank at 10.5 per cent for 90 days.
A
straight forward transaction the earns A Ltd earns Rs52.5
lakh, a cool, risk-free Rs5 lakh!.
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