ICICI Bank may cut rates in 45 days

The country's largest private lender ICICI Bank said that interest rates are expected to come down in the next one-and-a-half months.

"I think in next six weeks, interest rates are expected to come down. I think interest rates would be adjusted on their own," ICICI Bank CEO and MD K V Kamath said on the sidelines of a CII function.

In the recent days, many banks have reduced one-year fixed deposit rates by 2 per cent. HDFC Bank has also slashed interest rates on personal and commercial vehicles by up to 150 basis points.

The bank will also cut interest rates on corporate loans and wholesale credit, a move that will benefit small and medium enterprises and large companies.

Kamath, hinting at possible rate cuts said that the banks are also looking at passing it on to the customers.

"With the lowering of borrowing cost the banks will start lending at lower cost," he said.

With inflation declining sharply in the recent weeks and slowing demand, the Reserve Bank may signal softer interest rates even though it may not tinker much with key rates in the quarterly review of its annual monetary policy to be released on January 27.

Bankers feel that the RBI may maintain a status quo in their key rates as the Central Bank has already brought down CRR and short-term rates to inject Rs 3,00,00-crore liquidity into the system.

After hiking its signalling rates till October last year, the apex bank began slashing its cash reserve ratio, repo and reverse repo rates, to support growth.

The RBI has reduced its CRR to 5 per cent, repo to 5.5 per cent and reverse repo to 4 per cent.

Source: financialexpress

Citibank launches new fixed deposit product

Citibank, today announced the launch of a new fixed deposit product--Citibank Protect & Grow.

The product offers customers the safety of a fixed deposit with the option to channel the interest earned into mutual funds.

Customers will be able to choose any combination of a maximum of four open-ended mutual funds from among those distributed by Citibank, a statement issued here said.

Citibank Protect & Grow is designed to address the needs of investors seeking the potential to obtain returns that are greater than just the interest on the compare fixed deposit. The product offering is available for a minimum deposit of Rs 15-lakh for a minimum tenure of 1 year.

The fixed deposit interest rates, computed quarterly (simple interest), applicable for Citibank Protect & Grow are similar to those on Citibank's vanilla fixed deposits, it said.

"In the current environment, wealth preservation is as important as wealth creation. Therefore, we are very happy to provide our customers with an innovative solution that helps them get more out of their safe money," Citi India's Country Business Manager, Global Consumer Group, N Rajashekaran, said in the statement.

The key advantages of Citibank Protect & Grow is that it operates like a Systematic Investment Plan (SIP). The interest earned on the fixed deposit is invested every quarter into mutual funds, helping investors ride over the market highs and lows and averaging out the cost of purchase.

Citibank Protect & Grow will be distributed via the bank's 40 branches across 28 cities nationwide.


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Source:business.outlookindia.com

SBI slashes lending, deposit rates

The State Bank of India has decided to cut the prime lending rates by 0.75% from January 1, 2009. The PLR of SBI has been reduced to 12.25 per cent. As a result, all home loans and auto loans offered by the SBI will become cheaper on the New Year.

The cut in the PLR will be applicable to all existing and new floating rate loans. The SBI has also reduced its fixed deposit rates by 0.25-1 per cent.

Other banks, Union Bank of India and Canara Bank also have reduced their deposit and lending rates. Others may follow suit in a day or two. Among the private banks, HDFC was the only bank to reduce its PLR by 0.5 %. Others including the ICICI Bank are yet to take a decision on slashing the lending rates.



Source: breakingnewsonline.net

BoR further revises interest rates on fixed deposits

Bank of Rajasthan (BoR), a technology driven private sector bank, has announced revision in interest rates on fixed deposits across different tenure with effect from Jan. 5, 2009.

The revised rates are one of the best interest rates the BoR is providing as compared to other banks in current market scenario.

Interest rate for the period of 1 year to less than 15 months has been revised from 10.10 % to 9.60%. Interest rate for the period of 15 months has been revised from 10.35% to 10%.

Interest rate for the period above 15 months to 2 year has been revised from 10.10 % to 9.60%.

Interest rate for the period above 2 years to 3 years has been revised from 9.50 % to 9% and interest rate for the period above 3 years has been revised from 9.25 % to 8.75 %.

Interest rate for senior citizens for all maturity period will be 0.50% over the normal rate.

Shares of the bank gained Rs 1.1, or 2.65%, to end at Rs 42.60. The total volume of shares traded was 86,439.00 at the BSE(Friday).

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Source: myiris

Fixed deposits emerge as a feasible investment alternative

With stock market and mutual funds business domain lying in shambles after being pounded to black-n-blue by the economic catastrophe, fixed deposit has emerged quite a favourite alternative in the investors base when it came to switching over to a more reliable and effective return yielding channel in these turbulent times.

The best part of this whole trend has been the rate of interest. Yes, banking institutions across the country are now heavily relying upon their fixed deposit products to generate maximum revenue. Interestingly, the maximum percentage of interest available on a fixed deposit product is 11 percent for a minimum tenure of one to two years. What more, senior citizens are being offered an extra fraction of percentage as interest, so as to popularise the scheme in the often neglected age groups. However, investors are advised to keep a patient profile as it can lead to more fruitful results, as a steep fall in inflation can send the interest rates on this fixed deposit product further up.

However, what remains to be seen is that how does the associate banking products such as saving account and current account react under these sudden changes? Since, with the blossoming of fixed deposit, they too are anticipating bright prospects in the short as well as the long run.

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