A month after RBI’s rate hike, banks start raising deposit rates as liquidity shrinks, Bank of India the latest to move

Indian banks have started raising deposit rates about a month after the Reserve Bank of India increased rates, as liquidity in the banking system shrinks.

Bank of India is the latest lender to move, marking a broader response among banks following the RBI’s rate action. The shift places deposit pricing at the centre of the banking sector’s response to tighter liquidity conditions.

Bank of India joins the shift

The timing of the changes links the higher deposit rates to developments that followed the RBI rate hike. While the source does not specify the size or tenure of Bank of India’s rate adjustments, it identifies the lender as the latest bank to act.

Other banks have also begun raising deposit rates, indicating that the change is not limited to a single institution. The moves come roughly one month after the central bank’s rate increase.

Liquidity remains the key factor

Shrinking liquidity is the central condition behind the repricing of deposits. The available information does not provide details on how many banks have changed rates or whether further adjustments are planned.

For now, the reported moves show banks responding to tighter liquidity after the RBI’s rate hike, with Bank of India the latest example of that shift.