Representative image Photocredit: Sanjay Sharma
Savings deposit rates from some banks in the public sector (PSBs) rule at a historic low, since their de-regulation in 2011, according to the last bulletin of the reserve Bank of India (RBI).
The weighted average domestic term rates for fresh deposits has fallen considerably for both PSBs and banks in the private sector.
In October 2011, the RBI had ruled the interest rate of the Savings Bank deposit and allowed banks to determine the interest in itself.
The rates for small savings schedules were held unchanged by the government during the current quarter of September.
The prevailing rates on these instruments are higher than the formulas-based rates with 33-118 BPS, according to the article.
Furthermore, in response to the reduction of 100 BPS in the policy repepo rate since February 2025, banks have adjusted their repo-linked external benchmark-based credit rates downwards with 100 bps and marginal costs of funds-based loans with 10 BPS.
Consequently, the weighted average loan interest rate on fresh and outstanding rupees of commercial banks from commercial banks (domestic banks – 24 bps) and 18 BPS (Interior banks – 16 bps) fell, respectively, in February -May 2025.
On the sitting side, the weighted average domestic term positions on fresh and outstanding deposits moderated by 51 BPS and 2 BPS respectively for the same period.
During the current relaxation cycle (February-May 2025), the decrease in the weighted average loan percentages on both fresh and outstanding rupid lenses was higher for PSBs compared to banks in the private sector.
Published on July 27, 2025
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