Lakshmi Vilas raises deposit rates by 0.50 percentage points

The move is contrary to the growing feeling within bankers to somehow reduce the deposit rates in order to keep the cost of funds under check,which can be further passed on to the borrowers by lowering the rates.

The country’s largest lender State Bank of India had taken the lead a fortnight back and cut its deposit rates by 0.25 per cent,a move which was appreciated by a majority of top-level bankers,even though all others have held on to rates.

Experts cite the lower deposit growth as a factor which is pulling back banks from cutting rates on deposits.