The interest rate now is 10.5-11 per cent on deposits of Rs 1-5 crore as against 9 per cent earlier, and it is 10.5 per cent for deposits up to Rs 1 crore in place of 8.5-9 per cent earlier, according to the branch manager of a large public sector bank.

The situation is no different in other banks. The Delhi Development Authority (DDA) is a case in point. Application money was financed by banks at 10 per cent interest rate, but the DDA was seeking 11.5 per cent for depositing the same money in banks, said a senior official of another public sector bank.

In fact, public sector banks, including State Bank of India, have raised resources at 11-11.5 per cent interest from the market to lend to state-run fertiliser companies at 13.75 per cent. Under an arrangement facilitated last month by the Finance Ministry and the Ministry of Steel and Fertiliser, SBI would contribute Rs 12,000 crore loan out of a total of Rs 20,000 crore being provided by public sector banks to bail out fertiliser companies hit by liquidity crunch, a banking industry source said.