Banks likely to raise deposit rates to meet credit demand

With the excess liquidity in the banking system getting absorbed due to the Reserve Bank of India’s (RBI) incremental cash reserve ratio (I-CRR) measure, banks are likely to raise deposit rates on select tenors to meet higher credit demand ahead of the upcoming festive season.
Last week, the RBI asked banks to maintain an incremental cash reserve ratio (I-CRR) of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023. Lenders have to maintain I-CRR from the fortnight starting on August 12.
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