Lending major HDFC Bank and its peer group, HDFC are set to severe the deposit rates on fixed term maturity products by 25 basis points.

An official of the bank said, "Most of our rates are lower than competition. We will now lower rates on our flagship tenures, too, by 25 basis points."

"There is a downward bias in bulk deposit rates too. There is enough liquidity in the market," the official added.

In a statement, Keki Mistry, managing director and vice-chairman, HDFC, said that the bank awaits the union budget for any long-term changes in the interest rates.

In the beginning of this year, the bank reduced the lending rates to offer home loans up to Rs 30 lakh at an interest rate of 9.75%, while loans above Rs 30 lakh were set to be extended at 10.75 to the new borrowers.

Banks have been considering lowering of the interest rates, following the pre-budget meeting held between the Union Finance Minister, Pranab Mukherjee and top executives of public sector banks (PSBs) on 10th July 09, where the bankers were asked to lower the interest rates.