Axis Bank on Friday effected a sharp 100-basis-point cut in interest rates on deposits of more than Rs 5 crore with maturities of one, two and three years to 5.5%, reports Shritama Bose in Mumbai. The move came on the back of cuts by State Bank of India, which now pays interest of just 4.25% on one-, two- and three-year tenures with deposits of more than Rs 1 crore.
The country’s largest private lender, ICICI Bank, pays 6.55% for deposits of Rs 1 crore and more for a tenure above one year. HDFC Bank on Friday reduced rates on bulk deposits of Rs 5 crore and more with tenures above one year by 25 basis points (bps) to 6.5%.
With deposits pouring in after demonetisation, banks are rushing to cut interest rates on term deposits. State-owned lender IDBI Bank reduced bulk deposit rates effective Friday. It now pays 6.5% on one-year money, as against 6.6% earlier, and 6.25% on two- and three-year deposit, compared to 6.5% earlier. Among other major lenders, Bank of Baroda pays 5% on bulk deposits of all three tenures. It is the only bank other than SBI to offer a lower rate than Axis Bank.
Deposits with Indian banks rose by Rs 1.31 lakh crore, or 1.3%, between October 28 and November 11, according to data released by the Reserve Bank of India on Wednesday.
The amount includes deposits received by banks during the first two working days after the announcement of demonetisation.