Ahead of RBI's mid-quarter review of the monetary policy later this month, country's largest lender State Bank of India (SBI) on Thursday slashed fixed deposit rates by 0.25% across select maturities.
The bank has decided to revise its retail term deposit interest rates with a reduction by 0.25% in tenors up to 240 days, SBI said in a statement.
The new rates would be effective from Friday.
RBI is scheduled to announce mid-quarter review of monetary policy on June 18. It is expected that the central bank may cut policy rate by by 0.25% to spur growth.
Even RBI deputy Governor Subir Gokarn had said that there is a room to ease policy stance in the light of moderating growth and falling crude oil prices.
With the revision, the interest rate on 7-179 days fixed deposit would come down to 7% from the existing 7.25%.
Even for 180 days term deposit, the interest rate would be 7%, down 0.25%.
The base rate or minimum lending rate of SBI stands at 10%. Base rate is the benchmark rate below which a bank cannot lend.
The bank last revised its fixed deposit rates in April. It slashed interest rates on fixed deposits by up to 1% across various maturities.
The decision had come following the RBI's decision to cut key interest rate by 0.5% to 8% in its annual credit policy during April.