Mumbai: Top private sector lenders have cut their interest rates on deposits by up to 0.25 percent over the last week, officials said Monday.
Generally, an interest rate cut in deposits is seen as a precursor to a lending rate cut. The moves by lenders including ICICI Bank and Axis Bank come amid easing liquidity conditions and also within days of a rate cut by the Reserve Bank earlier this month.
The RBI is betting on rate cuts, and a subsequent pass-on of the same by the banks to borrowers, as one of the ways to prop-up the sagging economic growth.
ICICI Bank is understood to have cut its fixed deposit rates by 0.10-0.25 percent starting from Monday, officials said.
Under the revised rates for domestic deposits under Rs 2 crore, ICICI Bank will be paying 6.75 percent for a deposit of 290 days to under a year, and 7.30 percent for a deposit of over two years to under three years, according to the rates on the bank's website.
Its smaller rival Axis Bank has cut its deposit rates by up to 0.15 percent in select buckets, a bank spokesperson said.
All the downward reviews have been for deposits of over one year, the spokesperson said.
On the quantum of the cuts, a majority of them have been 0.15 percent, while in the case of deposits of over Rs 2 crore for a period between 3-5 years, the cut is 0.10 percent.
Largest private sector lender HDFC Bank also seems to have done a review of its deposit rates and the revised rates are applicable from last Wednesday.
The extent of the review and the maturities in which any review has been done was not immediately available.
The bank will be paying an interest of 7.30 percent for deposits of under Rs 2 crore for a year, according to its website.
After announcing a rate cut at its last policy move - the third such simultaneous action by the RBI in as many reviews, RBI Governor Shaktikanta Das had appreciated banks' response on passing on the RBI's rate calls, called as 'transmission'.
He had, however, said that more needs to be done by the banks.