Banks plan for lower interest on Bulk Deposits

http://www.thehindubusinessline.com/industry-and-economy/banking/article3776063.ece

Customers may now have to be content with a lower rate of return on bulk deposits parked with banks.

Faced with a daunting task of scaling down the share of bulk deposits (including certificate of deposits) to 15 per cent of total deposits by March 2013, banks are planning to lower interest rates on such deposits.

Banks also plan to approach the Union Government to seek an extended time period to comply with the norms. In a recent move, the Finance Ministry has directed public sector banks to bring down the share of bulk deposits to 15 per cent of their total deposits by March 2013.

The move was taken primarily to improve the banks' profitability and improve their asset-liability management.