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MUMBAI, Aug. 12

FOR the second time in a matter of just 15 days, Bank of India has cut its deposit rates by around 25-75 basis points with effect from August 16.

. Besides, domestic term deposit rates and non-resident external (NRE) term deposit rates have also been reduced.

For deposits of 15 to 90 days, the revised rate is 5.25 per cent (5.75 per cent), for 91 days to 364 days 5.75 per cent (6.5 per cent), for one year to less than three years 7 per cent (7.25 per cent) and for three years and above, the rate is 7.5 per cent (8 per cent). For deposits of Rs 15 lakh, in a maturity period of 7 to 14 days, the rate remains unchanged at 5 per cent.

Though, most banks had reduced lending rates once after the RBI pared the bank rate to 6.5 per cent in October last year, deposit rates have been cut far more aggressively.

Said one senior banker, "Banks are sitting on so much liquidity that in spite of cuts in deposit rates, there is still a healthy growth in deposits. With few avenues to deploy these excess funds, banks have been forced to cut their deposit rates.''

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