Scheduled commercial bank, Lakshmi Vilas Bank has lowered deposits rates on various maturity schemes.
The new rates will come into effect July 1, onwards.
With this revision, the interest rates on deposits of 271-364 days have been reduced by 100 basis points to 6.50 percent from the earlier 7.50 percent. The rates on deposits for a period of 1-2 years has been brought down to 7.50 percent from the earlier 8.25 percent, on deposits for 2-3 years to 8 percent from the earlier 8.75 percent, on deposits for 3-5 years to 7.75 percent (earlier 8.50 percent).
The revised rates on deposits for a term of five years and above, has been lowered to 8 percent from 8.75 percent.
In recent past, banks have been consecutively reducing interest rates, forced by ample liquidity and decreased credit exposure. The deposit rate cut is driven by divergence between the consumer and wholesale price indices, as explained by Usha Thorat, deputy governor, RBI - "The huge difference between consumer price index (CPI) and wholesale price index (WPI) confronts banks while reducing deposit rates."
Presently, the CPI is around 10 percent, whereas WPI hovers around (-)1.14 percent.
Lakshmi Vilas Bank Limited was founded in 1926 under the Indian Companies Act 1913. The bank obtained license from RBI in June 1958 and has a wide presence in state of Tamil Nadu, with focus on consumer banking, corporate banking and bancassurance. The net NPAs of the bank as on March 31, 2008 pegged at 1.55 percent, with a net profit earning of Rs. 25.27 Crores.