The state-owned banks have slashed interest rate on deposits further to maximum 6.5% from 7% in March due to sluggish investment and lower inflation.
The interest rate on term deposit was cut from lowest 0.5% to highest 1% effective from March 3 while lending rate remains unchanged.
Earlier on January 31, all the state banks set deposit rate at maximum 7%, lowering from 8%. At the same time, banks set lending rate at 14%.
The burden of excess liquidity and sluggish investment prompt banks to cut the deposit rate, said M Farid Uddin, managing director of Rupali Bank.
Moreover, inflation and lending rate remained downward. As a result, banks lowered the deposit rate, he added.
Depositors are getting interest in between 5.5% and 6% on term deposits for less than a six-month tenure from March which was 6.5% in February.
Banks cut the interest rate from 0.5% to 0.75% on the deposits of less than one year tenure.
The interest rate on long-term deposits has been set at 6.25% from 6.50%.
Some banks slashed their interest rate by 1% for short-term large amount of deposits over Tk25 crore.
