Some banks trimming deposit rates

After offering high interest rates on term deposits, some banks have now started reducing rates in order to ease the pressure on their margins. Centurion Bank Centurion Bank of Punjab announced that it is cutting interest rates on deposits of some maturities effective November 5. The bank cut interest rate on deposits for one-to-less-than two years to 8 per cent from 8.50 per cent and on deposits of 13 months 15 days to 9 per cent from 9.25 per cent. Last week, Union Bank of India had reduced deposit rates between 25 and 100 basis points on deposits of varying maturities. Bank of Baroda has cut the interest rate on car loans by 100 basis points as a festival bonanza. The new rate of 11.5 per cent would be effective for all new loans on floating option sanctioned on or after November 1, 2007. The bank is also offering an additional concession of 25 bps during the ongoing Centenary Retail Loan Festival period. State Bank of India has introduced a new time slab in its term deposits, of 550 days. For this period, the rate has been increased by 75 basis points to 8.75 per cent. Earlier the interest rate on the period of one to less than two years was 8 per cent.