Deregulation of the savings bank interest rate has led to a sharp spike in the savings bank deposits of Kotak Mahindra Bank (KMB) in Tamil Nadu. The bank, which has 19 branches in the State, will open three more branches over the next six months. The bank said the high interest rates offered by the bank on SB deposits clicked with the customers since it matched the post-tax yield of term deposits of ‘short to medium tenure’. That the interest earned in the savings bank account up to Rs 10,000 per year was tax free also weighed in with the customers. KMB said that after the new liberalised interest regime for SB deposits was announced by the RBI in October last year, KMB has witnessed a surge in SB deposits in Tamil Nadu. The SB deposit amount has grown by 45%, from Rs 181 Cr to more than Rs 263 Cr in Tamil Nadu region. The bank had, at the all-India level, seen a huge spurt of 68% in the savings bank deposit over a one-year period ending June 30, 2012 — from Rs 3,307 Cr on June 30, 2011 to Rs 5540 Cr on June 30 this year.
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