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Home > Business > Reuters > Report

SBI, ICICI Bank say may cut deposit rates

January 06, 2003 16:13 IST

State Bank of India, the nation's largest commercial bank, and ICICI Bank, the second-largest, both said on Monday that they might cut the interest rates they offer to depositors.

"We are examining it," State Bank of India chairman A K Purwar told reporters at a function celebrating the annual day of the National Institute of Bank Management, when asked if the bank was considering cutting its deposit rates.

ICICI Bank managing director H N Sinor said that his bank was also reviewing the situation, in response to a similar query.

"Government bond yields have fallen, but fixed deposit rates have not, so we need to realign," Purwar said.

State-run SBI now pays between 4.25 per cent and 6.5 per cent on deposits with maturities starting from 15 days to more than three years.

Private-sector ICICI Bank has a similar interest rate structure for deposits.

SBI has already lowered its deposit rates twice since the central bank cut key interest rates in its monetary policy review unveiled in end-October.

Indian interest rates have fallen sharply since the central bank cut rates, and the slide has been hastened by abundant liquidity.

The benchmark 10-year government bond yield has fallen by one percentage point since October to a new life low.

© Copyright 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.



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