Bank of India reduces interest rates on large fixed deposits

By | April 19, 2010

Despite anticipations of an increase in interest rates, Public sector bank, Bank of India (BoI) has reduced rates by up to 75 basis points on fixed deposits of Rs 1 crore and more.

A statement released by the bank says, “The revised interest rates on Domestic Rupee Term Deposits of Rs 1 crore and above will be applicable for various periods on fresh deposits and on renewal of maturing deposits wef 15.04.2010, other rates remaining the same”.

For deposits of minimum Rs 1 crore for 1-2 year maturity, the bank reduced the rate to 6% from 6.75%, while for those whose maturity period is 2-3 years, the rates have been reduced from 6.75% to 6.25%, it said.

With inflation reaching the double digit level, analysts anticipate RBI to further stiffen its monetary policy in its annual policy on April 20 that can cause an increase in both lending and deposit rates.

The Reserve Bank has already hiked the cash reserve ratio in its January policy review besides increasing its short-term rates by 25 basis points.

The  government owned Union Bank of India also lately increased deposit rates by up to 0.5% for different maturities.

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