Bank of Baroda Implements Aggressive Interest Rate Hike on Retail Term Deposits Post SBI’s Move

In the wake of the State Bank of India’s recent deposit rate increase of up to 50 basis points, Bank of Baroda takes a bold step by raising interest rates on domestic retail term deposits, marking a substantial surge of up to 125 basis points across various maturity periods. The revised rates, slated to commence from December 29, 2023, will be applicable to domestic deposits below Rs two crore, encompassing non-resident Indian ordinary (NRO) accounts, as communicated by BOB in an official statement.

Emphasizing a focus on shorter-term maturity periods, especially those below one year, Bank of Baroda aims to enhance the attractiveness of deposits for customers and contribute to the bank’s overarching goal of balancing and optimizing the overall cost of deposits, safeguarding its Net Interest Margin (NIM). This strategic move aligns with the bank’s broader strategy to bolster its share of shorter-term retail term deposits.

Ravindra Singh Negi, Chief General Manager – Retail Liabilities & NRI Business at BOB, expressed confidence in the initiative, stating, ‘We believe this step will not only attract more customers as they earn more on their savings but will also help the Bank optimize its cost of deposits, thereby safeguarding our NIM.’