Calcutta/Mumbai, Nov. 5: Banks are slashing their deposit rates even as they trim their lending rates.

Potential depositors may have a small two-week window within which they can still plonk down their surplus cash in fixed deposits and continue to earn interest at existing rates of around 10.5 per cent.

On Wednesday, four public sector banks — the Bank of India (BoI), the United Bank of India, Syndicate Bank and Canara Bank — indicated that they intended to cut their deposit rates by 50 basis points, or half a percentage point.

Canara Bank and the BoI said the deposit rate cut would be effective from December 1.

The United Bank of India’s executive director T.M. Bhasin said the bank would slash its peak deposit rate, which is 10.60 per cent at present, by the second week of this month.

“We had increased the deposit rate to 10.60 per cent from 10.50 per cent from the start of this month. We want to give our customers some time to deposit their money in the scheme before we close it or reduce the rate,” Bhasin said.

Banking mavens said Syndicate Bank would also cut its deposit rates by the end of the month. “Banks will stop giving a 10 per cent plus rate on deposits after the first week of December,” George Joseph, chairman of Syndicate Bank, said on the sidelines of a seminar organised in Calcutta by the Confederation of Indian Industry.

“Deposit rates will have to come down if banks reduce lending rates,” Joseph said.

Sources said the BoI had not yet decided on the maturity tenures that would be impacted by the rate rollback. It was only recently that the bank had raised the deposit rates by 25 to 50 basis points on certain maturities.

The BoI also announced today that it would cut its benchmark prime lending rate by 75 basis points to 13.25 per cent. The lending rate cut comes into effect from tomorrow. Sources said the rate cut would apply to all corporate, home and auto loans.

Canara Bank and the Bank of Baroda (BoB) also reduced their prime lending rates today to 13.25 per cent. While the BoB did not cut its home loan rates, Canara Bank said it would reduce home and auto loan rates by 25 basis points.

Meanwhile, the asset-liability committee of the State Bank of India (SBI) met in Mumbai today to take a final call on lending rate cuts. SBI chairman .P. Bhatt said yesterday that the bank would cut its lending rates by at least 50 basis points.

The country’s largest bank is expected to make a rate cut announcement in a day or two. The SBI will pare its deposit rates as well but the announcement is likely to come sometime after the lending rate cut.

Banks are planning to close down their special deposit schemes in the next two weeks. They were offering deposit rates above 10 per cent under these schemes.

On Tuesday, Union Bank had announced that its special deposit scheme offering 10.50 per cent interest per annum would be withdrawn with effect from November 9. Union Bank has been giving a 10.50 per cent interest rate on fixed deposits for 900 days since October 6 and has collected close to Rs 4,000 crore under the scheme.

After the RBI brought down the repo rate by 50 basis points to 7.5 per cent and slashed two key reserve ratios, Punjab National Bank (PNB), Union Bank of India, IDBI Bank and Syndicate Bank cut their prime lending rates by 50 to 75 basis points.

In the next few days, all these banks are expected to cut their deposit rates. PNB chairman and managing director K.C. Chakrabarty said the bank’s peak deposit rate would be cut to 10 per cent from 10.50 per cent from the beginning of next month.