Punjab National Bank Cuts Deposit Rates

New Delhi: Flush with funds, Punjab National Bank (PNB) on Saturday trimmed interest rate on fixed deposits by up to 0.25 per cent in line with competition.

Earlier this week, market leader State Bank of India (SBI) slashed its deposit rates by 0.15 per cent.

PNB said in a statement that it has reduced interest rates in select maturities by 10-25 basis points on term deposits.

The bank has received deposits of Rs 47,000 crore ever since Prime Minister Narendra Modi on November 8 surprised citizens by announcing demonetisation of Rs 500 and Rs 1,000 notes.

Besides, the bank has cut deposit rates on high value bulk deposits by 15-50 basis points.

The new rates would be effective from November 23, it said.

"The Current Account and Savings Account (CASA) has surged...the lowering of deposit rates will have impact on the lending rate going forward," PNB managing director Usha Ananthasubramanian said.

Earlier this week, State Bank of India (SBI), the country's largest lender, had reduced fixed deposit rates on select maturities by up to 0.15 per cent prompting others to follow suit.

Other banks including ICICI Bank, HDFC Bank and Canara Bank announced lowering of deposit rates.

The lowering in fixed deposit rates may herald reduction in lending rate as well in the next few days.