In light of slowing deposits growth, Country’s second-largest public-sector bank, Punjab National Bank (PNB), is not willing to prune its retail lending rates further until the cost of funds come down. According to the Reserve Bank of India's (RBI) data, deposit growth, which was 14.3%, was way below the central bank’s projection of 16 per cent for this financial year.
Deposit growth at Indian banks fell short of the RBI’s projection for fiscal 2011-12 amid an acute liquidity crunch as customers withdrew funds to cope with high inflation.
The bank, recently, decided to increase rate of interest on single domestic term deposit of less than Rs 1 crore by 25 basis points (bps) from 8.75% to 9% for maturity of one year with effect from August 02, 2012.
