At a time when the bankers are saying that deposit rate cuts are necessary for trimming lending rates...
At a time when the bankers are saying that deposit rate cuts are necessary for trimming lending rates, private sector lenders HDFC Bank and ICICI Bank have cut their retail fixed deposit rates in select maturities.
ICICI Bank’s website showed that it has lowered it deposit rates for customers within the Rs 1 crore bracket, for maturities between 390 days to 2 years by 25 basis points (bps) to 8.75%. These rates have been effective from November 28 thus lowering the maximum interest rate offered by it to 8.75% from 9% earlier.
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Another private sector lender HDFC Bank has also trimmed its retail term deposit rates maturing between 46 days to one year by 25-50 basis points, the bank website showed. These rates have be effective from December 1.
Public sector banks like State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB) and Oriental Bank of Commerce have also cut their term deposit rates citing excess liquidity and inadequate demand for credit. SBI for instance has cut its fixed deposit rates thrice in the last four months.
Recently after Reserve Bank of India’s (RBI) bi-monthly policy bankers said that lending rates would follow a downward trajectory in the first half of CY15. SBI Chairman Arundhati Bhattacharya had told a news channel that as the deposit rates trend downwards cuts in the base rates would be evident.
“We led the deposit rate cut a while back and now few bigger banks cut its rates about three weeks back and so, some of the bigger banks are now beginning to cut on their deposit rates,” Bhattacharya had said on Tuesday.
RBI data showed that deposit grew 12.16% y-o-y to Rs 82.53 lakh crore for the fortnight ended November 14 and non-food credit or loans given by banks to companies and individuals, grew at a a subdued 11.16% y-o-y in the same period.