Mumbai: State Bank of India (SBI) on Wednesday cut interest rates rates on bulk deposits by 15 basis points across one to three year tenors with immediate effect .
Meanwhile, Axis Bank reduced its marginal cost of lending rate (MCLR) due to strong growth in deposits after the government moved to scrap Rs500 and Rs1000 notes.
MCLR is the weighted average cost of borrowing.
Banks all across the country have seen a surge in their deposit base and other banks are expected to reduced interest rates in the near future.
Interest rates for SBI term deposits with tenor of one year to 455 days, 456 days to two years and two to three years will now stand at 6.90%, 6.95% and 6.85% respectively.
Axis Bank’s move to reduce its interest rates comes at a time when other competitors such as SBI, HDFC bank and ICICI Bank have reduced MCLR by 15 basis points in the past one month.
Axis Bank reduced MCLR by 15 basis points up to one year to 9.05%. MCLR for both two and three year tenors has been reduced by 20 basis points to 9.10% and 9.15% respectively. The reduced MCLR will take effect from Friday.
From 1 April, banks have started using MCLR as their benchmark lending rate.