State Bank of India cuts lending rates as demonetisation brings a deluge of deposits

Analysts say that with Reserve Bank of India (RBI) likely to cut rates further this year in the wake of falling inflation, banks may further reduce their lending rates. The surge in deposits will allow banks more leeway to pass on RBI rates cuts than before.

The RBI has not yet released the final numbers of deposits banks have attracted after the notes ban, which took out 86 per cent or Rs 15.44 lakh crore out of circulation. The deadline for depositing old 500, 1,000 rupee notes ended on December 30. Banks had garnered close to 12.5 lakh crore deposits in banned notes till 10 December, the RBI had said earlier.

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(Sourced from agencies, feature image courtesy:gizbot.com)