The banking spreads, based on outstanding lending and deposit rates, struck an eight-year record low of 6.18% last month in February, said the industry observers Tuesday. They said the last time such levels were witnessed was in April-05 when spreads on outstanding loans and deposits stood at 5.94% in April-05 consequential to a 7.49% average lending rate whereas average deposit rates stood at a meager 1.55%. On a yearly basis, the banking spreads had declined by a massive 112bps YoY from a level of 7.30% in Feb-12. Whereas deposit rates stepped down by 51bps YoY (to 5.34%) in Feb-13, the positivity induced by such was more than nullified by a turn down in average lending rates which fell by 163bps to a level of 11.52%. On a monthly basis the trend was, however, the same but with much less intensity as the spreads on outstanding lending and deposit rates fell by a slender 3bps. “Such was the outcome of a sizeable decline in average lending rates, down by 8bps, however 5bps decline in deposit rates balanced the latter translating into a 3bps decline in spreads,” said Muniba Saeed of InvestCap Research. Fresh spreads depicted a similar trend, falling by 4bps on a monthly basis whereas the same declined by 166bps YoY to 4.45% in Feb-13, she said. Deposit rates on fresh deposits prevailing at an altitude of 6.08% in Feb-13 whereas lending rates stuttering at 10.53%, directs the future path for banking spread.