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Mumbai , Nov. 7

STATE Bank of India has decided to lower its deposit rates by 25 to 50 basis points across maturities with effect from November 10.

Interest rates on domestic term deposits with a maturity of 15-45 days have been lowered by 25 basis points to 4 per cent, for 46-179 days 4.50 per cent (5.00 per cent), for 180 days to less than one year 4.75 per cent (5.25 per cent), for one year to less than two years 5 per cent (5.50 per cent), for two years to less than three years 5.75 per cent (5.25 per cent) and for three years and above 5.50 per cent (6 per cent). Interest rates on deposits with a maturity of 7-14 days remain unchanged at 4 per cent.

Deposit rates for senior citizens have also been revised downwards by 50 basis points. Rates on deposits with a maturity of one year to less than two years is 5.50 per cent (6 per cent), for two years to less than three years 5.75 per cent (6.25 per cent), for three years and above 6 per cent (6.50 per cent).

Debt market analysts are viewing the latest cut in SBI's deposit rates as a positive indicator, in absence of any other signals on the interest rate front. "The market is bullish on SBI reducing deposit rates. If nationalised banks start to lower their rates, it is an indication that they are comfortable with the interest rates scenario, and that rates are likely to remain soft in the medium term," he said.

While financial markets and industry watchers expected other public sector banks to follow suit immediately, it appears that banks such as Bank of India and Bank of Baroda do not have immediate plans to trim deposit and lending rates.

One Bank of India official said: "We are awaiting the Indian Banks' Association's report on the benchmark PLR and will then take a view."

Bank of Baroda officials said that the bank had already convened an Alco meeting post-Credit policy, and will wait and watch for the next couple of weeks before taking a decision on interest rates.

"We feel our rates are already aligned with the market, but let's see how the market reacts in the next few days. We may then review our position," said a senior Bank of Baroda official.

In the mid-term review of the monetary and Credit policy, the RBI left the benchmark Bank rate untouched, contrary to expectations of a 25-50 basis point cut in the bank rate and repo rate and also a similar cut in the savings bank rate. On the same day, Central Bank of India cut its PLR by 50 basis points and brought it down to 11 per cent.

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