|
| Help | |
| You are here: Rediff Home » India » Business » Business Headline » Report |
|
| ||||||||||||||||||||||||||||||||||||||||||||
| Advertisement | ||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||
HDFC Bank [Get Quote] and HSBC have set the ball rolling for their private sector and foreign peers to lower deposit rates.
Effective On Thursday, the country's second-largest private sector lender HDFC Bank lowered deposit rates by 50-225 basis points across various maturities.
A senior bank executive told Business Standard that, based on the impact on fund mop-up, HDFC Bank will decide over the next few weeks if it will cut lending rates too.
"We have seen a very healthy flow of deposits in the last few months, probably next only to State Bank of India [Get Quote]," the executive said.
Similarly, HSBC also lowered interest rates on deposits with a tenure of six months to three years. Now, deposits with the bank will earn between 7 per cent and 8.25 per cent.
Public sector banks have lowered both deposit and lending rates, while almost all private and foreign banks have stayed away from rate cuts despite the Reserve Bank of India reducing key rates.
Public sector banks cut deposit rates from December 1.
HDFC Bank has become the first private sector lender to reduce deposit rates, while other private sector banks said they would also jump on the bandwagon over the next few weeks.
"Interest rates are definitely headed southwards and it is in our interest to cut lending rates over the next few weeks. We are examining the possibility," said a senior executive of a large private sector bank.
"We are closely watching the market movements on liquidity and interest rates and will take a decision accordingly," said ICICI Bank [Get Quote] executive director V Vaidyanathan.
"At present, the country's second largest bank offers between 7.50 per cent and 10.50 per cent on deposits with maturities of six months to three years.
Many private and foreign banks, including IndusInd Bank [Get Quote] and Standard Chartered Bank, still offer 11 per cent interest on fixed deposits. IndusInd Bank offers 11 per cent on deposits of 200, 400 and 1,000 days, while Standard Chartered offers same rates on deposit of 95 days.
"The trend in interest rates is downwards. We feel liquidity is comfortable. We have our assets and liability committee meet next week, where we will decide on interest rates for both lending and deposit.
"There could be a 25-50-bps cut in deposit rates and lending rates will be concurrent. We have to consider that liability rates are yet to fall. Now that some banks have slashed rates, we all will also follow," said Romesh Sobti, managing director and CEO, IndusInd Bank.
Andhra Bank [Get Quote] On Thursday said it has reduced short-term deposit rates by 50-75 basis points with effect from Friday. The state-owned bank will now offer 8.75 per cent for 6 months to less than 9 months deposits below Rs 15 lakh (Rs 1.5 million).
Similarly, it will offer 9 per cent for 9 months to less than 12 months deposits and 9.75 per cent for 1 year to less than 649 days and for 651 days to less than 2 years.
Powered by
| Email | Print | Get latest news on your desktop |
|
|
| © 2008 Rediff.com India Limited. All Rights Reserved. Disclaimer | Feedback |