A day after the Reserve Bank of India (RBI) Governor's meeting with bank chiefs, public sector lenders State Bank of India (SBI) and IDBI Bank have cut rates.
While SBI, the largest lender in the country, has slashed its deposit rates across various maturities by 25-50 basis points, IDBI Bank reduced its benchmark prime lending rates (PLR) by 50 basis points to 13 per cent with effect from April 15.
SBI has reduced the interest rate on deposits for a period of one year up to two years by 35 basis points to 7.75 per cent. And, deposits between two years and 1,000 days would now earn an interest of 8 per cent against 8.5 per cent earlier. The new rates would be effective from April 13.
This is for the second time in a month that the bank has reduced its deposit rates. Earlier on March 3, the bank had reduced its deposits rates across various maturities by 40-50 basis points.
When contacted, IDBI Bank Chairman and Managing Director Yogesh Agarwal said, “The interest rates environment is soft and the cost of funds is also coming down.”
The public sector bank also reduced its interest rates on retail term deposits by 25 basis points to 50 basis points in maturity buckets of 15-45 days, more than six months to less than a year and one year to three years.
On Wednesday, RBI Governor Duvvuri Subbarao had met bank chiefs to discuss the interest rate scenario. The governor indicated that the banks had further room for paring the lending rates.
Apart from SBI, most of the public sector banks had reduced lending rates with effect from April 1.