Realigning its interest rates to market rates, Punjab National Bank (PNB) has raised interest on fixed deposits by 25 to 125 basis points for various maturities with effect from August 16.
It is not a hike but an adjustment to the market rates after it was noticed that these rates were not revised upward in last two years says a Business Standard report.
PNB increased deposit rates by 125 basis points to 8.75 per cent for 2-3 year deposits below Rs 15 lakh from 7.5 per cent.
The bank also increased deposit rates by 50 basis points to 8 per cent for deposits of below Rs 15 lakh and by 25 basis points to 8.25 per cent for deposits above Rs 15 lakh for 1-2 year deposits.
The special deposit scheme which was giving 9.5 per cent per annum for one-year deposit has been withdrawn.
PNB, the second-largest public sector lender, expects credits and deposits to grow by 20 per cent and 18 per cent in 2007-08.