State Bank of Travancore has effected interest rate cuts, following the recent changes in the monetary policy as announced by the Reserve Bank of India.
The interest rates on domestic deposits have been revised downward, with deposits set to get interest between 7 and 8.85 per cent depending on the period of a deposit. The rates for NRE term deposits too have been revised with effect from Thursday. The rates have dropped by 0.5 per cent and now range between 9 and 8.25 per cent.
Banking circles say paring the interest rates on deposits is an indication of the fall in the rates for loans, including home and vehicle. Interest rates on deposits had been revised upwards over the last few months. This has raised the cost of deposits, and bringing down the rates on advances could be possible only after paring the deposit rates.
All the state-based banks like Federal Bank, South Indian Bank, Dhanlaxmi Bank and Catholic Syrian Bank would convene their committees to work out their assets and liability managing committees sometime this week. Top bank officials said any move to bring down the interest rates on loans would have to be preceded by a cut in the deposit rates.
And they are expected to follow SBT in the days ahead and interest rates on loans would be down over the next few months, they added.