Industrial Development Bank of India (IDBI) has slashed the interest rates on its domestic deposits by up to 50 basis points across various maturity buckets.

The new deposit rates will come into effect August 12, 2009 onwards.

The rate of interest on deposits up to six months has been kept unchanged.

The rate of interest on deposits for one year and up to two year has been reduced by 50 basis points to 6.75 percent from the earlier 7.25 percent.

The interest rates on deposits for 2 years and up to 1100 days and on deposits for 1100 days has been lowered to 7.25 percent and 7.50 percent respectively (earlier 7.50 percent and 7.75 percent respectively).

The highest rate offered by the bank is 8 percent, on deposits with duration of 7 to 10 years.

The rate of interest on tax-saving suvidha deposits is also 8 percent p.a. Senior citizens deposits will attract an additional interest rate of 50 basis points above the stated card rates.

A penalty of 1 percent will be levied on premature withdrawals.

The bank has also reduced lending rates for its auto-loan borrowers. With this revision, the rate of interest on auto loans for tenure of three years would range from 10.50 to 12 percent. Auto loans with a period of five years will be offered at an interest rate between 10.75 to13 percent.

Currently, the benchmark prime lending rate (PLR) of the bank is 12.75 percent.