Private sector major ICICI Bank has cut interest rate on savings account deposit by 25 basis points (bps), inline with the savings account rate cuts recently done by other large private banks including HDFC Bank and Axis Bank.
The bank will now offer 2.75 per cent interest rate for savings account with balances of up to ₹50 lakh, lower by 0.25 per cent offered earlier, and 3.25 per cent interest rate on savings account with over ₹50 lakh balance, down from 3.50 per cent earlier.
The move by top private banks is aimed at aligning their savings account rate with country’s largest lender State Bank of India (SBI), which presently offers 2.70 per cent interest rate on savings account.
Deposit rate cuts comes after the Reserve Bank of India (RBI) cut repo rate by 25 bps last week. businessline had earlier this week reported that large banks including HDFC Bank, SBI, Kotak Mahindra Bank, Bank of India and Yes Bank, among others have slashed their deposit rates by up to 25 bps on some tenures. Lenders also slashed external benchmark linked loans by 25 bps, following the RBI’s repo rate cut.
Bankers say recent interest rate cuts show that banks are ensuring that repo rate cut transmission occurs into interest rates. Last week, RBI Governor Sanjay Malhotra had said that the regulator will ensure keeping liquidity at surplus mode at the level of around 1 per cent of deposits.