Local and foreign banks are stepping up their strategies for luring retail deposits in the face of new regulations that demand they hold a higher level of ready capital.
The Basel III rules, as they are known, take effect next year and deem that deposits are a preferred source of funding. They are seen as more stable compared to unsecured wholesale funding, which may be cut at short notice in a liquidity crunch.
The response has been a flurry of bank offers, particularly from foreign institutions, to entice people to deposit their cash. ICICI Bank, for example, is offering a fixed deposit interest rate of up to 1.65 per cent for 36 months with a minimum deposit of $100,000.
At ANZ bank, a one-year term deposit of more than $150,000 yields up to 1.6 per cent per annum. Analysts believe that foreign banks are looking to pare down their dependence on counter-party borrowing, irrespective of the Basel III requirements.
The Basel III rules, as they are known, take effect next year and deem that deposits are a preferred source of funding. They are seen as more stable compared to unsecured wholesale funding, which may be cut at short notice in a liquidity crunch.
The response has been a flurry of bank offers, particularly from foreign institutions, to entice people to deposit their cash. ICICI Bank, for example, is offering a fixed deposit interest rate of up to 1.65 per cent for 36 months with a minimum deposit of $100,000.
At ANZ bank, a one-year term deposit of more than $150,000 yields up to 1.6 per cent per annum. Analysts believe that foreign banks are looking to pare down their dependence on counter-party borrowing, irrespective of the Basel III requirements.