However, Punjab National Bank raises the rate on single deposit of less than Rs.1 crore
State Bank of India (SBI), on Thursday, lowered the interest rate on domestic term deposits of five-year maturity and above to 8.5 per cent. “The bank has decided to revise downwards the interest rate on domestic term deposits for tenors of five years and above to 8.5 per cent with effect from August 7,” said SBI. At present, it offers 8.75 per cent on deposits below Rs.15 lakh and 9 per cent on deposits from Rs.15 lakh to less than Rs.1 crore.
“The cut in the Statutory Liquidity Ratio (SLR) by the Reserve Bank of India to 23 per cent from 24 per cent will result in about Rs.10,000 crore additional liquidity to SBI,” said Atanu Sen, Deputy Managing Director, here while addressing a press conference.
“To transact RBI’s policy expectations by giving a stimulus to credit for productive purposes as well as deliver value to customers, the bank has reduced the home loan and car loan interest rates by up to 50 basis points with effect from August 7,” Mr. Sen added. SBI said that it was expecting its retail loans to grow 15-20 per cent in the current financial year.
The bank said that sluggish growth in the property market prompted it to cut its annual home loan growth target.
The bank, which cut its home loan rates on Wednesday, was earlier targeting a 25 per cent growth in its home loan book. Such loans are expected to grow by only 15-20 per cent, the bank said. “There has been a drop in home registrations and we want to be realistic and now expect that the home loan segment will grow by only 15-20 per cent,” Mr. Sen said.
Meanwhile, Punjab National Bank (PNB) raised its deposit rate for one year by 0.25 percentage point to 9 per cent. “The bank has decided to increase the rate of interest on single domestic deposit of less than Rs.1 crore from 8.75 per cent to 9 per cent for a maturity of one year,” PNB said in a filing to the BSE.
The bank further said that NRE term deposits would also attract an interest rate of 9 per cent, as applicable to domestic term deposits.