IDBI cuts retail deposit rates by 0.5 per cent

In the first such move since RBI cut its key rates last week, state-run IDBI Bank today cut its fixed deposit rate offering in two maturities by up to 0.50 per cent.

The rate cut is a "considered response to the signals emanating from RBI's monetary policy," a statement from IDBI Bank said.

The Reserve Bank had cut its key rate by 0.25 per cent at its policy announcement last Friday. Bankers had said such a move does not make any difference to their cost of funds.

Bankers have been blaming the high cost of funds, fuelled by the elevated deposit rates, as the inhibiting factor preventing a pass-through of Reserve Bank's repeated repo rate, or the short-term lending rate, moves to borrowers.

IDBI Bank cut the offering on the 91 days to less than six months deposit by 0.50 per cent to 7.25 per cent while the same for six months to 269 days product now goes down by 0.15 per cent to 8.50 per cent, the statement said.

The revisions are effective from May 13, it added.

The city-headquartered bank also rationalised the additional interest payable to senior citizens at 0.50 per cent over the normal for deposits of over six month to up to 20 years.

Senior citizens will earn at par of the normal card rate for deposits till six months, it said.