The 25 to 50 basis points cut in domestic term deposit rates by the State Bank of India (SBI) has spurred Bank of Baroda (BoB) and Bank of India (BoI) to follow suit.
While BoB has pared term deposit rates by 25 to 50 basis points across all maturity buckets except one (the 180 days to less than one year deposits), BoI has brought down deposits rates by 40 to 75 basis points on deposits in three maturity buckets at the short-end (up to six months).
The deposit rate of BoB is effective from July 23 and that of BoI from August 1. In the case of SBI the deposit rate cut is effective from July 29.
According to analysts, huge liquidity in the banking system as signified by the daily repo bids in excess of Rs 25,000 crore and falling yields in government securities and corporate bond market is forcing banks to pare deposit rates.
For 15-45 days deposits, BoB is offering 5.25 against 5.50 per cent earlier, on 46-90 days term deposit the new rate is 5.50 per cent (6 per cent); on 91-180 days the rate is 6 per cent (6.25 per cent); on 181 days to less than one year the rate is unchanged at 6.50 per cent.
For one to two years the rate is 7 per cent (7.25 per cent); on two to three years the rate is 7.25 per cent (7.50 per cent); and on deposits of three years and above it is 7.50 (eight per cent).
In the case of BoI, interest rate on term deposits in the 46-90 days maturity bracket has been pared to 5.60 per cent against 6 per cent earlier, the new rate on deposits for 91-179 days is 5.75 per cent (6.25 per cent) and on deposits in the 180 days to less than one year bracket, the interest rate is 5.75 per cent (6.50 per cent).
BoI is offering 5 per cent interest on deposits in the 15-45 days deposits; 7.25 per cent on deposits for one-to-two years; 7.50 per cent on the two-to-three years; 8 per cent on the three-to-five year range; and 8.25 per cent on the five years and above bucket.
