In the wake of the RBI's monetary policy committee (MPC) voting to reduce the repo rate by 25 basis points (bps) to 5.75 per cent, some of the country's leading private sector lenders have also cut their interest rates on deposits by varying percentages. The move by ICICI Bank, Kotak Mahindra Bank and Axis Bank also comes amid easing liquidity conditions.
On Monday, ICICI Bank lowered interest rates by between 10 bps and 25 bps on select maturities for domestic deposits under Rs 2 crore. The bank will now pay 6 per cent for deposits of tenures 61-90 days, 91-120 days and 121-184 days compared to 6.25 per cent previously. Similarly, the new rate on maturity period of 390 days to 2 years has come down to 7 per cent from 7.10 per cent, while that on 2-3 year tenure is down 20 bps to 7.3 per cent.
Axis Bank's revised rates on domestic deposits came into effect on June 15. According to a bank spokesperson, it has cut its deposit rates in select buckets for deposits of up to Rs 2 crore for maturities of over one year. For instance, the bank is now offering 7.10 per cent on 1-year tenure, down from 7.3 per cent previously.
Their smaller rival Kotak Mahindra Bank has gone a step further and rejigged its buckets, reducing the total tenures on offer from 20 to 18. The interest rate on the 18 months to less than 2 years tenure is now 7.10 per cent while previously three separate buckets between 391 days and less than 2 years earned 7.20 per cent. Similarly, deposits of 2-3 year maturity now earn 10 bps less at 7 per cent.
Edited by Sushmita Choudhury Agarwal