More banking institutions announced that they are lifting up rates of interest on fixed deposits (FDs) after the surge in key policy rates by the central bank of India.

On July 30, Bank of Baroda and Kotak Mahindra Bank declared that they are raising depository rates.

With credit growth growing, banking institutions are intensifying their deposit mobilization with the aim to lift up resources.

Bank of Baroda is raising depository rates by 25 bps to 50 bps for all maturities over 90 days. The new rates will be applicable from August 02, 2010.

Kotak Bank is heightening rates by 25-100 basis points from August 1.

The 100 basis points augmentation is only on 15-30 days deposits of over Rs 15 lakh.

The rate of increase for other tenors is between 25 bps and 50 bps.

Among the banks, which have already increased depository rates comprise Central Bank of India, HDFC Bank, Lakshmi Vilas Bank and Allahabad Bank.

Other banking institutions are likely to follow suit.