In an unexpected move for customers, Kotak Mahindra Bank has instantly modified interest rates on fixed deposits (FD) just hours after the Reserve Bank of India (RBI) lowered the repo rate. A private-sector lender reduced the rates for specific tenure FD by up to 15 basis points while leaving depositors bothered regarding lower returns from investments.
RBI Rate Cut Triggers Immediate Bank Response
In the morning, April 9, 2025: The RBI reduced the repo rate–the rate at which it lends to commercial banks-from 6.25% to 6% to try to stimulate how much more economic growth the nation can achieve. This has been part of the central monetary policy review by the central bank on the borrowing stimulus effects to get people using their credit much more.
There is a drastic difference in the way Kotak Mahindra Bank took the step-no wait of weeks or even months; they acted on the same day and announced a revision in FD interest rates. The revision took immediate effect for regular and senior citizen depositors.
Revised FD Rates As At Kotak Mahindra Bank
- Regular Deposits: Now among 2.75 percent and 7.30 percent, raised earlier.
- Senior Citizens: All adjusted between 3.25% to 7.80%, or decreased by up to 15 basis points.
This sudden cut has left a sour taste in the mouth of many customers, particularly those who rely on fixed deposits for consistent returns even in times of volatility in the market.
Bank Cuts FD Rate after Repo Rate Cut
Banks find it cheaper to borrow compared to the earlier repo rate, so they tend to cut loan interest rates- home loans and auto loan as well-as a relief for the borrowers.
The dual adjustment helps balance banks’ business of lending and deposit with creating an imbalance in profitability for the banks by generally lowering deposit rates.
Will Other Banks Follow Kotak Mahindra’s Move?
They should be among the banks announcing FD rate reductions soon. If you were thinking of locking some funds away at the present rates of interest, this is the moment to do that before further cuts will take place.