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U need to be flexible with the lending rate to bring in more customers . When customers do not have many options to invest (when the share market is too risky) people will invest in bank deposits even at a low interest rate. When the share market is stable and peole are investing in the share market the int rate has to raised to bring in more customers. Also a high depositors rate would adversely affect the lender as he has to pay a higher interest rate.
