April 4, 2013
MUMBAI: Lord Balaji continues to command a premium. Tirumala Tirupati Devasthanam, the trust that manages the Tirumala Venkateswara Temple, has parked its money with banks at 9.8% for a year. Last week, the trust, known as TTD, had called for bids from banks to park Rs3,000 crore for a year.
April 4, 2013
MUMBAI: Lord Balaji continues to command a premium. Tirumala Tirupati Devasthanam, the trust that manages the Tirumala Venkateswara Temple, has parked its money with banks at 9.8% for a year. Last week, the trust, known as TTD, had called for bids from banks to park Rs3,000 crore for a year.
Several banks participated in the auction, but only a handful were allotted funds, bankers said. The 9.8% return on its deposits is higher than the 8.5-8.75% that banks are offering retail customers for oneyear deposits. Bankers said that TTD received a good rate due to the timing of the auction. It called for bids from banks just before the close of the fiscal year, when banks were falling over each other to mobilize deposits.
The aggressive bidding was despite the government discouraging PSU banks from raising bulk deposits, especially towards the end of a fiscal year. Last year, the finance ministry had barred public sector banks from mobilizing bulk deposits more than 15% of their total deposits. The rush to mobilize bulk deposits towards the end of FY13 was mainly because of banks' eagerness to offset any redemption of the huge sum of deposits they had raised in the last quarter of FY12. A finance ministry study showed that in the quarter ending March 2012 alone, banks had raised Rs9,05,000 crore as against the Rs6,20,000 crore raised on an average in the first three quarter of FY12.
This prompted it to place a 15% cap on bulk deposits as banks were offering 11-12% for three-month certificates of deposit. The data released by RBI shows deposits rose 14.25% year on year, as on March 22, short of the 15% it had projected.
Sensing a slowdown, RBI had revised deposit growth projection from 16% to 15% in October 2012.
Courtesy: ET
