MUMBAI: Reduction in saving deposit rates by three large banks over the past fortnight may set the ball rolling for lower lending rates and stoke greater competition among lenders, says a report. Bank of Baroda and Axis Bank followed, which last week revised downwards their savings rates by a similar quantum for deposits of up to Rs 50 lakh. A few large banks cutting savings deposit rates over the past few weeks is a move in that direction," the agency said in a report. The report also said slashing saving deposit rates for an amount below Rs 50 lakh presents large public banks that have stable, large and granular savings deposit base with additional manoeuvrability over private peers to cut marginal cost of lending rate. Public sector banks have more room than private banks to percolate savings banks rate cut into reduction in MCLR because of a large base and sticky saving accounts.

Source: Economic Times August 13, 2017 06:11 UTC