India's largest lender State Bank of India (SBI) on Thursday slashed interest rates on domestic term deposits of maturity of five years and more by 0.25% points to 8.50%.
"The bank has decided to revise downwards the interest rate on domestic term deposits ... effect from August 7, 2012," said Atanu Sen, deputy managing director and chief credit and risk officer, SBI.
The bank currently offers an interest rate of 8.75% on deposits below Rs 15 lakh, and 9% on deposits from Rs 15 lakh to less than Rs 1 crore.
Reduction in deposit rate came a day after SBI announced 0.50% point cut in interest rates of home and car loans.
The bank, which was expecting a 25% growth in home loans, is now hopeful of achieving 15-20% growth in the financial year.
"There has been a drop in home registrations and we want to be realistic and now expect that the home loan segment will grow by 15-20%," said Sen.
Management expects the cut in interest rates will push up its growth in the coming months.
He said the home loan book has grown by 10% in the first quarter of 2012-13.
SBI has maintained its overall home loan market share at 17% in the segment.
Within the state-run banks alone, SBI's share is 26%, with the total home loan book currently standing at Rs 105,000 crore.