Before taking a decision on reducing interest rates on fixed deposits, mid-size public sector banks would wait till the mid-term policy review by the Reserve Bank of India, top officials said on June 11.
Executive Director of Vijaya Bank, Subhalakshmi Panse said that the bank will take a call on the reduction of deposit rates after the mid-term policy. She said that the entire cost structure and overall deposit growth would be taken into account before reducing rates on fixed deposits.
Interestingly, deposit growth registered by Indian banking system fell short of RBI's target last financial year amid liquidity crunch faced by the lenders.
Last fiscal, banks' deposits grew 13.4 per cent to Rs 60.72 trillion in the year to March 23, below the RBI's projection of 17 per cent.