Faced with a strong inflow of current account and savings account (CASA) deposits following the demonetisation of ₹500 and ₹1,000 notes, State-run Punjab National Bank (PNB) has decided to cut its deposit rates by 10-25 basis points on select maturities of retail term deposits.

In the case of certain bulk deposits the extent of cut will be 15-50 basis points for select maturities. The revised rates will be effective November 23.

However, the bank is yet to announce the maturities on which the revised rates would take effect.

Managing Director & Chief Executive Officer (CEO) Usha Ananthasubramanian had on Saturday said that the bank had received as much as ₹47,000 crore in additional CASA deposits over the past 10 days.

“Our CASA deposits have surged. This has given me an opportunity to revisit deposit rates. It will also have an impact on lending rates, but deposit rates have to come down first,” she said.

Since November 8, PNB has also recorded 68.47 lakh transactions involving ₹2,514 crore toward exchange of notes.

PNB’s move to cut deposit rates comes on the heels of State Bank of India effecting a deposit rate cut two days ago. Last Wednesday, SBI had cut deposit rates by 15 basis points across three maturity buckets. This cut takes SBI’s interest rates on one-year deposits below 7 per cent — 6.9 per cent — for the first time since 2009.

SBI had also cut interest rates on deposits from 450 days to less than two years by 15 basis points to 6.95 per cent, Deposits of two years to less than three years to 6.85 per cent.

In the past 10 days since the Centre announced the demonetisation of notes, PNB has “recalibrated” nearly 2,000 of its 9,000-strong ATM network.

Recalibration of ATMs is expected to enable these machines to dispense the new ₹2,000 notes.

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