With effect from May 7, 2022, Punjab National Bank (PNB), a significant public sector bank in India, has increased interest rates on fixed deposits on certain tenors by up to 60 basis points.
PNB in a press release stated: “PNB revised its Fixed Deposit (FD) rates after the Reserve Bank of India (RBI) increased repo rates by 0.40 percent or 40 basis points, to tackle rising inflation in the country amid factors such as geopolitical tensions and supply shortage.”
PNB new FD interest rates
Rates on single domestic term deposits of less than Rs 2 crore have increased by 10-20 basis points. Deposits up to Rs 10 crore are eligible for the increased FD rates. Single domestic term deposits of Rs 2 crore to Rs. 10 crore (Callable) would see a 60 basis point rate hike for maturity buckets of 30 days to 45 days, and a 50 basis point rate hike for maturity buckets of 271 days to 1 year.
According to the PNB press release, below are the latest interest rate offered
Single Domestic Term Deposits of less than Rs. 2 crore: (Callable)
For maturity bucket of 7 days to 14 days from 2.90% to 3.00%
For maturity bucket of 15 days to 29 days from 2.90% to 3.00%
For maturity bucket of 30 days to 45 days from 2.90% to 3.00%
For maturity bucket of 91 days to 179 days from 3.80% to 4.00%
For maturity bucket of 180 days to 270 days from 4.40% to 4.50%
For maturity bucket of 271 days to 1 Year from 4.40% to 4.50%
For maturity bucket of 1 Year from 5.00% to 5.10%
For maturity bucket of >1- 2 Year from 5.00% to 5.10%
Single Domestic Term Deposits of less than Rs. 2 crore: PNB UTTAM (Non-Callable)
For maturity bucket of 91 days to 179 days from 3.85% to 4.05%
For maturity bucket of 180 days to 270 days from 4.45% to 4.55%
For maturity bucket of 271 days to 1 year from 4.45% to 4.55%
For maturity bucket of 1 Year from 5.05% to 5.15%
For maturity bucket of >1- 2 Year from 5.05% to 5.15%
Single Domestic Term Deposits of Rs. 2 crore to Rs. 10 crore: (Callable)
For maturity bucket of 7 days to 14 days from 2.90% to 3.50%
For maturity bucket of 15 days to 29 days from 2.90% to 3.50%
For maturity bucket of 30 days to 45 days from 2.90% to 3.50%
For maturity bucket of 46 days to 90 days from 3.00% to 3.50%
For maturity bucket of 91 days to 179 days from 3.00% to 3.50%
For maturity bucket of 180 days to 270 days from 3.00% to 3.50%%
For maturity bucket of 271 days to 1 year from 3.00% to 3.50%
For maturity bucket of 1 Year from 3.50% to 4.00%
For maturity bucket of >1- 2 Year from 3.50% to 4.00%
For maturity bucket of >2-3 Year from 3.50% to 4.00%
For maturity bucket of >3-5 Year from 3.50% to 4.00%
For maturity bucket of >5-10 Year from 3.50% to 4.00%
All other interest rates, according to PNB, would remain unchanged. Note that NRE/NRO term deposits (Callable only) plan would also be affected by the rate change.
Hike in repo rates
The repo-linked lending rate (RLLR) for existing clients was raised from 6.5 percent to 6.9 percent on June 1 by the state-owned Punjab National Bank (PNB). According to the PNB website, “As on date, Repo Linked Lending Rate (RLLR): 6.90% w.e.f. 01.06.2022 for existing customers. However, for new customers it will be effective from 07.05.2022.”
Other banks, too, have increased repo rate linked loan rates.
ICICI Bank and Bank of Baroda have already increased the interest rates of repo rate linked home loans post the RBI announcement.
Note that existing borrowers’ interest rates, which are tied to the repo rate or any other interest rate benchmark, both internal and external, will remain unchanged until their loans’ next reset date. The new interest rate on their reset date will be computed using the benchmark rate and credit spreads in effect on that date.
