The Reserve Bank of India said on Monday it will lower the maximum rate that non-banking finance companies can offer on retail deposits by 150 basis points to 11 per cent just days after it cut key rates.

The new ceiling goes into effect on Tuesday.

"Taking into account the market conditions and changes in other interest rates in the entire financial system, the maximum rate of interest that NBFCs can pay on their public deposits has been revised to 11 per cent per annum," the Reserve Bank of India, which regulates these companies, said in a statement.

On Friday, the central bank cut its repo rate, a key short-term benchmark, by half a percentage point to five per cent, its third reduction in this fiscal year to March 31, just hours after the government announced it was lowering the rates on some of its saving schemes by a percentage point.

About 2.6 trillion rupees are invested in these state-run schemes, which compete with bank deposits for funds.

The central bank also cut the rate that banks offer on savings accounts -- demand deposits on which people can write cheques -- by half a percentage point to 3.5 per cent.

Analysts saw all these moves as heralding significantly lower interest rates across the economy.