Days after Prime Minister Narendra Modi signalled that rates are on the way down, State Bank of India (SBI) slashed bulk deposit rates by up to 1.9% taking advantage of the surge in deposits following demonetisation.
The reduction in deposit rate by the country's largest lender may be precursor to a lending rate cut.
With the revised interest rates, the 180-210 day fixed deposit will attract 1.90% lower interest rate at 3.85% as against the 5.75% earlier.
For fixed deposits between 1 year to 455 days, the rate has been lowered to 6% from 4.25%.
For FDs between 7 days to 45 days, the new rate will be 1.25% lower at 3.75%.
On Sunday, PM Modi had said: "Over Rs 5 lakh crore deposited with banks are not going to be kept idle. Banks will have to extend loans for all sorts of economic enterprise... for which they will have to bring down their interest rates.