Rise in deposit interest rates causes concern

The move was a cause for concern, as a deposit rate rise may lead to a lending rate increase as well. For this reason, many enterprises are concerned about an interest rate race between banks, especially as the demand for funding will rise from now until the end of the year.

According to economists, an interest rate increase in small commercial banks is only temporary. While it is sensible for banks to hike deposit rates, analysts have warned them to only increase the rates slightly to ensure lending interest rates do not also need to be raised, in order to maintain their business borrowers.