The smaller banks, which require a higher current account and savings account (Casa) ratio, are rough customers by increasing interest rates 150-200 basis points (bps). So much so that now pay less for the individual fixed deposit (FD), the owners, mostly wealthy people, some possessions in the 15-90 days range.

But things could change when the big boys to participate in the race. RK Bansal, Managing Director, IDBI Bank, said: "Although not immediately, in the future, the short interest to be comparatively higher, but it depends on the liquidity situation and its requirements." .

Difference in rates would not have a significant impact on companies that work through the current accounts that pay interest.

The need of the hour, the Casa, is for many a bank project. For example, Yes Bank, which started the war savings rate by increasing the interest rate 200 basis points to six percent, with 4-5 percent for deposits of less than Rs 15 lakh for 15 - 45 days. Price for the elderly are one percent higher. Rana Kapoor, President, Yes Bank, said: "We expect that there would be a shift of people from short-term deposits to savings bank accounts, because the rates are better It's better for banks terms of administration, and also for consumers. Since a higher rate is payable on a daily basis. "

The same spirit has led the Bank from 3.5 to six percent for deposits below Rs 15 lakh. It offers an interest rate of 5.5 percent of savings in the RS 1 lakh and six percent for those over one lakh RS. Kotak Mahindra Bank and Ratnakar Bank also announced similar increases.

Investors, particularly wealthy individuals, use the short-term deposits fixed on their way to park surplus funds. In this way, they earn a higher return, and also provides cash when they need money urgently. Banks traditionally pay more for 50-100 bp of these deposits, because they get the float to provide short-term loans. Rajeev Ahuja, director (strategy), Ratnakar Bank, said: "With bank savings are also more liquid than the Framework Decisions and comes with an installation checkbook.

Even the big banks that still have to increase fixed deposit interest rates, earnings of 50 to 100 basis points more than the savings rate (four percent of them) up to 45-90 days for the SDS. Both HDFC Bank and ICICI Bank to offer 5 to 7 per cent for 30-90 days. State Bank of India has a single rate of seven percent (for deposits of less than Rs 1 crore) across the spectrum of September 90 days.

When you join the race to raise prices, things could change. Since nearly 10-15 per cent of the money comes from the equity of individuals, banks can continue to maintain the distinction. High public sector bank official said, "FD rates up to 90 days of deposit would attract a higher net worth individuals in the future.

The bankers also believe that larger banks are playing a game to wait and see, because of the comfort of home, which would also be forced to raise prices over time. "Everyone should raise prices sooner or later," said a bank official of large private sector banks.

Source: ET