State Bank of India on Thursday slashed interest rates on fixed deposits in select maturities by 0.25 percent, a development that is likely to be followed by other banks.
The bank has decided to revise its retail term deposit interest rates with a reduction of 0.25 percent for tenors up to 240 days, State Bank of India (SBI) said in a statement.
After the revision, the interest rate on 7-179 days fixed deposit would come down to 7 percent from 7.25 percent.
Interest rate would be 7 percent for 180-day term deposit, down 0.25 percent.
The bank has made no change in the lending rates. The base rate or minimum lending rate of SBI stands at 10 percent.
Base rate is the benchmark rate below which a bank cannot lend.
The decision to cut deposit rates by the country’s largest bank assumes significance as it comes a few days ahead of the Reserve Bank’s mid-quarter review of the monetary policy on June 18.
The central bank is expected to cut policy rates by 0.25 percent to spur economic growth.
RBI Deputy Governor Subir Gokarn had said earlier this week that there is a room to ease policy stance in the light of moderating growth and falling crude oil prices.
SBI had last revised its fixed deposit rates in April. It had slashed interest rates on fixed deposits by up to 1 percent across various maturities.
The rate revision had come following the RBI’s decision to cut key interest rate by 0.5 percent to 8 percent in its annual credit policy during April.
–PTI