State-owned Oriental Bank of Commerce (OBC) has raised fixed deposit rates by up to 0.75 per cent across select maturities on account of tight liquidity situation.
The bank raised interest rate on domestic term deposits maturing between 91-179 days to 8.50 per cent from 7.75 per cent up 0.75 per cent, OBC said in a statement on Wednesday.
For deposits maturing between 270 days to less than one year interest rate has been increased by 0.25 per cent to 8.50 per cent from existing 8.25 per cent, it said.
However, 180-269 days term deposit would earn 8.50 per cent from existing 8 per cent.
The new rates would be effective from Thursday, July 25, it added.
In order to check the rupee depreciation, the Reserve Bank of India (RBI) in the last two week has taken a slew of steps to tighten liquidity. As part of its continuing fight to check rupee fall, the apex bank on Tuesday announced additional liquidity tightening measures to contain excessive speculation and volatility in the foreign exchange market.
The RBI has reduced the liquidity adjustment facility (LAF) for each bank from 1 per cent of the total deposits to 0.5 per cent, thus limiting the access to borrowed funds from the central bank. The limit will come into force with immediate effect and continue till further notice, the RBI has said.
In another measure to suck out liquidity from the system, the apex bank has asked banks to maintain higher average cash reserve ratio (CRR) of 99 per cent of the requirement on daily basis as against earlier 70 per cent.
Cash reserve ratio is portion of deposits that banks are required to keep with the apex bank.
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