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Rediff.com  » Business » Banks may cut rates by 100 bps

Banks may cut rates by 100 bps

June 18, 2009 17:37 IST
With inflation turning negative for the first time in 30 years, banks are gearing up for interest rate cut up to 100 basis points.

"Interest rates should come down. We will take a look tomorrow as to how much deposit and lending rates further can be cut," UCO Bank chairman and managing director S K Goel said.

"My rough estimate is that 100 basis points at least, we will be able to reduce," Goel said. Kolkata-based UCO bank will hold its ALCO (Asset and Liability Committee) meeting tomorrow to take a view on rate cut.

Meanwhile, State Bank of Bikaner and Jaipur, the largest subsidiary of SBI, reduced deposit rates by up to 100 basis points on various maturities effective from today.

The one to two years peak deposit rate has been reduced by 100 basis points to 7.25 per cent.

Last week, the country's largest lender State Bank of India reduced deposit rates across all maturities by 25 basis points.

According to Oriental Bank of Commerce Executive Director H Ratnakar Hegde, "Inflation below zero level would definitely result in reduction in interest rates."

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