Top officials of mid size public sector banks said that they will decide on whether or not to cutback the fixed deposit rates after Reserve Bank of India releases its mid-term policy review.
Ms Subhalakshmi Panse, the Executive Director of Vijaya Bank, said, "We will take a call on cut in the deposit rates after the mid-term policy". She added that the decision could be made after taking into account the entire cost structure and overall deposit growth.
SBI recently cut its fixed deposit interest rates by 0.25 per cent in loans with time period of up to 240 days.
The move came after the Indian banking system could not achieve RBIs target deposits for the last fiscal year. The deposits increased to 13.4 per cent that is to Rs 60.72 trillion in the year ending March 23.But the RBI's projection of growth in deposits was 17 per cent.
On the wait till the RBIs midterm policy review, the officials of the banks said that the review will accurately mention the cost structure of the banks which will help them to decide on the FD rates. Mr Sudhir Kumar Jain, the General Manager (Financial Management, IRC, Treasury & ID), Dena Bank said, "Basically, it depends on the fund management position of different banks".
He further added that the banks will take into account the availability of funds to reach on a decision for reducing the deposit rates.