Close on the heels of local private and public sector banks' deposit rate cutting spree following RBI's significant repo rate cut since February 2019, foreign banks in India which already paid 100 basis point less in comparison on retail deposits have been further lowering their interest rates. 1 basis point is one-hundredth of a percentage point. This is understandably being done as these banks look to scale down their retail liability portfolio with lower opportunities in the credit growth segment.
However some of the foreign banks still offer a better return in comparison to Indian state-run and private sector banks:
|Foreign Banks||Term deposit rate on 1-2 year tenure|
|Standard Chartered Bank||5.4%-5.5%|
nterest rate on foreign bank Fds for a tenure of 1-2 years (taken to be as the benchmark) is listed out based on the data as on November 3, 2020 on respective banks' site.
Notably just 2 months back (i.e. as on September 2, 2020, FD at Standard Chartered Bank fetched a handsome 6.3% per annum rate of interest. And now the differential in FD rates between leading Indian banks and foreign banks as per a leading dailies report has increased to 7-year high.
Furthermore, as per an RBI release, while weighted average term deposit rate of foreign banks stood at 3.33 percent, the difference with state-run banks was at 241 basis points in September.