The depositing savings plans will be affected since the leading banks have interest rates in fixed deposits and savings accounts, a measure that was expected after the Bank of the India Reserve reduced the repo rate at 25 basic points (BP) last week.
The RBI says that liquuidity will remain at a surplus level allowed lenders to reduce deposit rates even the challenge of the mobilization of thinking deposits persists.
The largest lender in the country Banco State in India (SBI) has reduced the fixed deposit rate by 1-3 years of possession in 10 bp (as reflected in the table below). These rates cuts will enter into force on April 15. Similarly, the largest private lender in the country HDFC Bank reduced the interest rate of the savings account at 2.75 percent, as of April 12.
“The target cuts will be wide -based and banks that have a good house relationship (current account and savings account) will lead the race. Little financial banks will also follow, since the cost of the funds can remain high if not, which will affect the margin of net interest.
“Banks that can reduce the cost of deposits can also attract good borrowers, which will have a waterfall effect,” said RK Gurumurthy, Karnataka Bank treasurer.
Two senior officials of private banks said deposit rates can fall into many banks for this month. This means that banks ensure that the transmission of the rest rate occurs.
Last week, the governor of RBI, Sanjay Malhotra, said that the regulator will guarantee to maintain liquidity in surplus mode at around one percent of bank deposits.
“I will not rush exactly at 1 percent, but yes, that is the child of the range, our goal is Mintain. If more requested, we will inject more liquidity and if less liquidity is required, we will absorb it.
Another official of the Private Bank Treasury said that the smallest banks won to be in a hurry to reduce the deposit rate yet, but the others will follow it.
PSBS lead
However, what can encourage customers are loan rates cuts.
As the RBI reduced the repo rate last week, the great lenders also reduced the interest rates of loans linked to the repo rate and another external reference point, public sector banks touch leadership in reducing loan rates fish private colleagues.
SBI, for example, reduced the external reference point linked loan rates (EBLR) in 25 BPS to 8.65 percent, while reducing the loan rate linked to the repository (RLLR) in 25 PB to 8.25 percent. The new rates will be implemented as of April 15.
Punjab National Bank and Bank of India reduced the RLLR in 25 bp to 8.85 percent each. Indian Bank and Bank of Maharashtra reduced the RLLR in 35 bp and 25 bps to 8.70 percent and 8.80 percent, respectively.
In a recently Business line The podcast of current accounts, the senior vice president of Icra Ratings, Anil Gupta, had said that the cuts of repository fees would lead to a lower cost of indebtedness for companies and also retail borrowers.
However, the transmission rhythm could be different between deposit and loan products.
“… We believe that the cutting rate cut will be calibrated more for the retail segment and, therefore, a gradual reduction in the cost of the funds will occur for a period of time, which will be reflected in a slower transmission in the MCLR (marginal cost of the loan rate based on funds) for banks for banks. Julio-Mayúcas for banks, “he said, he said.
Posted on April 14, 2025