The spree of reduction in interest rates on term deposits continued, with ICICI Bank on Tuesday cutting rates on one- and two-year retail deposits by 10 basis points (bps) to 6.9% and 7%, respectively. The bank also slashed the rate on three-year deposits by 25 bps to 6.75%.
ICICI Bank’s interest rate for one-year money is now at par with that of State Bank of India (SBI).
Since demonetisation, the country’s leading banks have cut rates on one-year money by between 15 bps and 90 bps.
Since November 8, SBI’s interest rate on one-year deposits of less than Rs 1 crore has fallen from 7.05% to 6.9%.
The two largest private-sector lenders, HDFC Bank and ICICI Bank, have reduced the rate by 35 bps during the same period to 6.9%, while smaller rival Axis Bank has taken it to 7% from 7.25% during the same period. While banks had begun cutting deposit rates after the RBI cut the repo rate by 25 bps to 6.25% on October 5, the process picked up pace after the November 8 announcement.