New Delhi, March 26 -- Mumbai: Deposit rates may begin to come down starting April as lenders move to protect margins, at a time of easing credit demand and expectations of another repo rate cut.

Most banks did not change their deposit rates after the Reserve Bank of India reduced the repo rate by 25 basis points (bps) in February. Consequently, lending rates for corporate customers remained largely unchanged. Banks also worried that lower rates may drive out deposits in a quarter where loan demand usually peaks.

Bankers said that another rate cut in April-which looks likely after the 3.6% inflation print for February-would necessitate deposit rate cuts, the only way to pass on the lower costs to more borrowers.

"The rate of interest i...