HDFC Bank Cuts Savings Rate by 25 bps to 2.75%
Why in the news
The private lender trimmed its savings account rate as the RBI’s repo cuts and tight liquidity pushed banks to protect margins.
Key facts
- New rate: 2.75%, down 25 bps, effective 12 April 2025.
- Peers: ICICI Bank and Axis Bank offer a minimum 3% for balances under ₹50 lakh.
- Merger: HDFC Bank merged with HDFC in July 2023.
- Aim: encourage term and recurring deposits to ease liquidity.
CD ratio
| Stage | Credit-deposit ratio |
|---|---|
| Before merger | 85%-87% |
| After merger | Above 100%, owing to the inherited mortgage book |
| Now | 98% |
Why rates are falling
- A second repo rate cut in 2025 pressures funding costs and net interest margins.
- Savers are moving towards mutual funds and capital market products, weakening demand for savings accounts.
- ICRA’s Anil Gupta says retail term deposit rates may drift lower over time.
Exam angle
- Terms: basis point, CD ratio, repo rate, net interest margin.