Mumbai, Sept. 2: ICICI Bank today became the second bank after Bank of Baroda to pinch investors when it cut deposit rates by 25 basis points (0.25 per cent).
It attributed the decision to the half a percentage reduction in repo rate announced by Reserve Bank of India (RBI) last month. The lower rates, it said, are in sync with the easy liquidity position and declining interest rates in the market after RBIís August 25 decision that brought down the short-term rate to 4.5 per cent.
Under the new regime that will be effective from Wednesday, the rate will be 5.50 per cent (down from 5.75 per cent) on deposits of 1-3 years, 5 per cent for those from 91-180 days (5.25 per cent) and 5.75 per cent (6 per cent) on those of 3 to 10 years.
On high-value deposits of Rs 15 lakh-1 crore, the rate will be 5 per cent (5.25 per cent) on deposits between 91 days and 180 days, 5.25 per cent for 181 days to a year, 5.50 per cent for 1 year to three years and 5.75 per cent for three years to 10 years.
On August 26, Bank of Baroda cut deposit rates by 25 basis points. Other nationalised banks, including State Bank, are expected to follow suit within days. However, reductions in lending rates could take a while.