Press Trust of India, New Delhi, March 30: Leading private sector lenders ICICI Bank and HDFC Bank have cut rates by up to 0.25 per cent on high value fixed deposit on select maturities, a move that could be a precursor to lower lending rates.
The rates have been revised downwards for deposits over `1cr by 0.25 per cent by ICICI Bank effective today, sources said.
Fixed deposit rate of maturity between 121-150 days has been revised downward to 8 per cent from 8.25 per cent earlier.
Term deposit of the country’s largest private lender between 61-90 days for high value fixed deposit over ` 5cr and above has been lowered to 8 per cent from 8.25 per cent.
Similarly, for term deposit between 91-120 days would attract lower interest rate of 8 per cent.
The second largest private sector lender, HDFC Bank too lowered its rates on fixed deposits of over `5cr and above effective yesterday.
Earlier this month, Axis Bank reduced fixed deposit rates by up to 0.25 per cent across various maturities.
Axis Bank was one of the first major lenders to slash its deposit offering after RBI’s repo cut on March 4.
The third largest private sector lender has cut its deposit rate offerings by 0.25 per cent across buckets in the 18 to 36 months window, Axis Bank official said.
Similarly, for deposits up to 18 months, the rates have been decreased by 0.15 per cent to 8.50 per cent.
With easing liquidity conditions and the low credit off take, Axis Bank was among the few which cut its base rate or the minimum rate of lending in October last year by 0.10 per cent.
It can be noted that the RBI indicated a shift in its stance after getting a grip over inflation and delivered a surprising 0.25 per cent cut in January, and followed it up with a similar move on March 4, indicating its comfort with the budget announcements.
Following these moves, the repo rate at which the central bank lends to the system, currently stands at 7.75 per cent.
While banks claim the policy moves generally take time to get transmitted into actual lending rates, the RBI has been unhappy with the banks for not passing the benefits of the rate cuts to the borrowers.
The country’s largest lender, State Bank of India, has indicated that it would be very difficult to have a cut in lending rates till the end of March, which is generally the busy season for credit off take.
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