If you thought your neighborhood bank branch offer more to your savings idle after deregulation in recent years, you may be disappointed.

Public sector banks, which have more than 70% of total bank deposits in the mood to raise interest rates, because they are convinced of their "loyal" customers do not desert, "a few basis points," more. They are also wary of rising funding costs, which will put pressure on their interest margins.

State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, UCO Bank, Indian Overseas Bank, Syndicate Bank, Indian Bank, Dena Bank and Bank of Maharashtra are some of the public sector banks have told Business Standard that not "s are no immediate plans to raise the savings bank deposit rate.

SBI, after the creation of a committee to review the case, decided not to increase for now.

"The public sector banks are in no hurry to raise rates because the balance of savings accounts remains stable. We do not anticipate the migration of customers in number due to a difference in the rates. A couple of customers in metros can change banks but we have many branches in rural areas where no other bank is present, "said Krishna Kumar, General Manager, State Bank of India.

The second largest lender Punjab National Bank, also said he was in no hurry to revise the rates. "The central bank has recently liberalized the rate of savings. We are waiting and watching what happens in the market. We have no hurry to revise the rates," said president and executive director KR Kamath.
According to RBI data, savings deposits in most households. Savings deposits constitute about 22% of total deposits of scheduled commercial banks and about 13% of financial savings in the household sector.

After the deregulation of the savings rate of bank deposits last month, some private sector banks, Yes Bank, IndusInd Bank, Kotak Mahindra Bank and Ratnakar Bank immediately increased the rate to boost its low-cost deposit franchise . Current account and savings account (Casa) deposits are the basis of low cost bank deposits. The banks with more deposits House enjoy a relatively low cost.

Several banks have attracted the interest rates of 4% savings in bank deposits. Increases in interest rates would be the pressure on costs and margins.

"We believe that there are four% is optimal, because the costs of servicing these accounts. Our assets and liabilities, the Committee believes that this is not the right time to increase the employment rate. When the interest rates for term deposits starts to decline, it is the right time to jack up the rate of deposit of savings, "said TM Bhasin, President and CEO, Indian Bank.

Bankers said that until the fixed deposit interest rates of moderate weather, they can not walk in the bank rate savings. "We have no intention to increase the speed. We will wait and see on the market. We prefer to term deposit rates to moderate the first. The current rate of 4% is pretty attractive," said M Narendra, CMD , Indian Overseas Bank.

Lenders are also building government in its relations with long-standing customers as a mattress.

"Customers in this segment are less sensitive to the number. Many have relationships with us for decades. Some basic points, does not abandon us," said MG Sanghvi, Vice President of Bank of Maharashtra.

Bankers said the savings deposit accounts are used primarily for trading purposes, not for the savings fund. Thus, customers may not be ready to move from one bank to another. "Customers can be issued post-dated checks or ECS on savings accounts. Nobody takes the trouble to move all these services from one bank to another," said a senior official of a public sector bank.

Source: Business Standard