According to the latest bulletin of the Reserve Bank of India (RBI), some public sector banks (PSB) savings deposit rates have been historically at the lower level since the regulation was free in 2011.

There has been a significant decline in the weighted average domestic term deposit rates for new deposits of both PSB and private sector banks. An article published in the July Bulletin of the RBI said, “Savings deposit rates of some public sector banks are currently at the lower level since the regulation is free in 2011.”

In October 2011, the RBI made the savings bank deposit interest rate free of regulation, and allowed banks to determine the interest rate as per their wish.

The government did not make any changes in the rates of small savings schemes during the current September quarter. The article states that the rates prevalent on these mediums are from 0.33 to 1.18 percent above formula -based rates.

It further stated that in response to a decrease in policy repo rate from February 2025, banks reduced the external benchmark based lending rates studded with their repo by one percent.

Along with this, the marginal cost based loan rate of the fund was reduced by 0.1 percent. In such a situation, weighted average debt rates on new and outstanding money loans of commercial banks were reduced by 0.26 percent and 0.18 percent respectively during February-May, 2025. During this period, weighted average domestic term deposit rates on new and outstanding deposits were reduced by 0.51 percent and two percent respectively.