<p>However, in an additional offering to woo customers in the current rising interest rates scenario, bank has decided to do away with penalties on premature withdrawals of fixed deposits.<br /><br />The Mumbai-headquartered bank levies a premature withdrawal penalty of one per cent presently, its Executive Director Sushil Muhnot told PTI. When asked about feasibility of the abolition of penalty, he said this will be a "limited period offer".<br /><br />In a rising interest rate scenario, customers prefer shifting their deposits to a bank offering higher interest rates and withdrawal of the penalty will help the bank attract more deposits.<br /><br />Fresh deposits and renewals made after January 1, 2011 will not be charged a withdrawal penalty, the bank said in a statement.<br /><br />Under the renewed interest rates, which are effective January 4, a 500-1099 days deposit under Rs 15-lakh will fetch an interest rate of 9 per cent as against the earlier 8.25 per cent, it said.<br /><br />The rate hike has been done in view of "credit demand, inflation and liquidity scenario", the statement added.<br /><br />Other lenders such as Dena Bank, Kotak Mahindra Bank, State Bank of India and HDFC Bank among others have already hiked their retail term-deposit rates.</p>
<p>However, in an additional offering to woo customers in the current rising interest rates scenario, bank has decided to do away with penalties on premature withdrawals of fixed deposits.<br /><br />The Mumbai-headquartered bank levies a premature withdrawal penalty of one per cent presently, its Executive Director Sushil Muhnot told PTI. When asked about feasibility of the abolition of penalty, he said this will be a "limited period offer".<br /><br />In a rising interest rate scenario, customers prefer shifting their deposits to a bank offering higher interest rates and withdrawal of the penalty will help the bank attract more deposits.<br /><br />Fresh deposits and renewals made after January 1, 2011 will not be charged a withdrawal penalty, the bank said in a statement.<br /><br />Under the renewed interest rates, which are effective January 4, a 500-1099 days deposit under Rs 15-lakh will fetch an interest rate of 9 per cent as against the earlier 8.25 per cent, it said.<br /><br />The rate hike has been done in view of "credit demand, inflation and liquidity scenario", the statement added.<br /><br />Other lenders such as Dena Bank, Kotak Mahindra Bank, State Bank of India and HDFC Bank among others have already hiked their retail term-deposit rates.</p>