The private sector lender, Axis Bank, has slashed the interest rates on fixed deposits having maturity periods between a year to 18 months to 8.50 percent. The bank has cut about 25 basis points (bps) of the existing interest rate. The move is said to have been taken to decrease the cost of funds of the bank, in the light of its low credit growth.
Last month itself the bank had reduced its rates on term deposits having a maturity between 1 year and 18 months to 8.75 percent (a rate cut of 25 bps), and for deposits having maturity between 18 months to five years to 9 percent (again a rate cut of 25 bps). Earlier this week, Bank of India cut its short term fixed deposit rates too.
Earlier in September, other banks such as SBI, Union Bank, ICICI Bank and HDFC Bank had slashed their rates also on various term deposit products. Other banks such as Canara Bank, Bank of Baroda etc are expected to follow suit in reducing their fixed deposit interest rates soon.