Banks may soon be withdrawing fixed deposits that offer a grand 8 - 8.5 per cent. CNBC-TV18 reports that most bankers believe that rates aren't going to rise any further.

Speaking at a seminar organised by the Federation of Indian Chambers of Commerce & Industry, O P Bhatt, chairman, State Bank of India, said, that he sees rates softening, and then moderated his statement saying he would rather give his views after the second quarter results and the monetary policy review.

However, many bond dealers believe that Bhatt was right in sensing that interest rates have definitely peaked. Bhat had said, "Looking at the falling crude prices and the slowdown in the US economy, clearly there is a softening."

So what does this mean for the small borrower and depositor? It is likely that banks will end their high return deposit products like ICICI's 8 per cent for 390 days and IDBI Bank's 8.25 per cent for 500-day deposits.

Officially, the retail heads of these banks could not be reached for confirmation. But highly placed officials said that the banks are mulling such a move.

On the other hand, PSU bankers were happy that despite severe pressure from their branches they resisted the move to compete with these high cost deposits.