Demonetisation impact: ICICI, HDFC Bank cut fixed deposit rates by 0.25%

New Delhi: Faced with liquidity comfort, major lenders, including ICICI and HDFC Bank, today lowered FD rates by up to 0.25 percent in view of surge in deposits following the demonetisation. [caption id=“attachment_2602380” align=“alignleft” width=“380”]  Reuters[/caption] The lowering in fixed deposit rates may herald reduction in lending rate as well in the next few days. For fixed deposit between 390 days to 2 years, the banks has lowered the interest rate by 0.15 percent effective yesterday, ICICI Bank website showed. ICICI Bank will pay 7.10 percent as against 7.25 percent earlier. Meanwhile, HDFC Bank has reduced interest rate by 0.25 percent across all tenures on bulk deposits ranging between Rs 1-5 crore. The new rates are effective today, as per HDFC Bank website. With the revised interest rates, the one-year fixed deposit will attract an interest rate of 6.75 percent as against the 7 percent earlier. For fixed deposits between ‘3 years 1 day-5 years’, the rate has been lowered to 6.5 percent from 6.75 percent. Yesterday, the country’s largest lender SBI slashed fixed deposit rates on select maturities by up to 0.15 percent. Private lender Axis Bank has cut marginal cost of fund-based lending rate (MCLR) by 0.15-0.20 percent. Till yesterday, SBI collected Rs 1,14,139 crore in deposits over the last seven days after the government announced to scrap Rs 500 and Rs 1,000 notes. According to estimates, banks have collected cash deposit of over Rs 4 lakh crore following the demonetisation decision announced on November 8 by Prime Minister Narendra Modi.