Oriental Bank of Commerce (OBC) has reduced the interest rates on certain domestic term deposits.
Interest rates have been cut by 25 basis points on domestic term deposits (including NRO deposits) under various maturities for 270 days and above of term deposits of less than Rs 1 crore.
For deposits of less than Rs 1 crore, the deposit rate on maturity period of 270 days to less than 1 year has been reduced from 8.5 per cent to 8.25 per cent.
For deposits with maturity period of one year to less than two years, the deposit rate has been lowered to 8.75 per cent from 9 per cent earlier.
There has been a 25 basis points cut in interest rates in other buckets — two years to less than three years, three years to less than five years, and five years to ten years as well.
The revised rates have come into effect from today. This move is being seen as a precursor to review the bank’s base rate, which stood at 10.25 per cent.
With interest rates in the system softening, there may be increased pressure on public sector lenders to further reduce their lending rates. Already, there is some criticism that banks have not reduced their lending rates commensurate to the reduction in policy rates by the RBI.
Despite the latest reduction in deposit rates, OBC will aim for a higher net interest margin of 2.9 per cent this fiscal, V. Kannan, Executive Director, OBC said.
OBC had closed last fiscal with a net interest margin of 2.82 per cent.