ICICI Bank and HDFC Bank, two of the leading private sector lenders in India, on Wednesday slashed interest rates on fixed deposits.

ICICI slashed interest rates across maturities that range between 91 days and five years. This private sector lender now offers a maximum 8.75 per cent on retail term deposits, 50 basis points lower than 9.25 per cent it had been offering earlier. But, the lender's new maximum rate is still higher then State Bank of India's maximum rate by 25 basis points.

The move shows that private banks are making efforts to maintain their net interest margins (NIM).

Speaking on the developments, a banking analyst from a domestic brokerage firm said, "We could now see private players reduce lending rates to get competitive. ICICI Bank is also doing this to maintain a healthy margin of over 3%."

HDFC Bank slashed interest rate on retail deposits by 25 to 50 basis points across maturities ranging from one year deposits to five-year deposits. The maximum rate being provided by HDFC now is 8.75 per cent, 50 basis points lower than 9.25 per cent that was offered previously.

ICICI Bank and HDFC Bank have slashed rates on fixed deposits in wake of a similar move by the SBI - the state-run biggest lender in India. A few days back, SBI announced cuts in rates by as much as 100 basis points across several maturities in a bid to maintain profitability.