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State Bank of India, the country's largest lender, said on Friday it will raise interest rates on retail term deposits below 20 million Indian rupees ($241,499.23) by up to 80 basis points from Oct. 22.

While loan growth in India was at a multi-quarter high with a 16.4% jump in the fortnight ended Sept. 23 from a year earlier, according to the central bank data, deposit growth across the industry has remained comparatively tepid at 9.2%.

Indian banks are competing harder to boost deposits amid tightening liquidity and rising credit demand ahead of the festive season.

SBI raised interest rates on saving bank deposits above 100 million rupees by 30 basis points earlier this week.

($1 = 82.8160 Indian rupees)