Revises rates on non-resident deposits to 8.5 per cent
State Bank of India (SBI), on Wednesday, announced that it would reduce term deposits rates by 50-100 basis points (bps) across tenures with effect from September 7.
For deposits below Rs.15 lakh, the rates for 7 days to 90 days, 91 days to 179 days and 180 days were reduced from 7 per cent to 6.50 per cent; for 181 days to 240 days, the rate has been reduced to 6.50 per cent from 7.25 per cent; and for 241 days to less than one year to 6.50 per cent from 7.50 per cent. The rates for one year to less than 2 years, 2 years to less than 3 years and 3 years to less than 5 years have been reduced from 9 per cent to 8.50 per cent. However, for 5 years and up to 10 years, the rate will remain at 8.50 per cent. For deposits of Rs.15 lakh to less than Rs.1 crore, the rates for 7 days to 90 days, 91 days to 179 days, 180 days, 181 days to 240 days and 241 days to less than one year have been reduced to 7.50 per cent from 8 per cent. The rates for one year to less than 2 years, 2 years to less than 3 years and 3 years to less than 5 years have been reduced from 9 per cent to 8.50 per cent. The rate for 5 years and up to 10 year would remain at 8.50 per cent.
SBI has decided to revise interest rates on non-resident fixed deposits for tenors of 1-5 years to 8.5 per cent from 9 per cent effective September 7.
Last month, the bank revised interest rates on domestic term deposits of maturity of five years and more by 0.25 percentage point to 8.50 per cent.
About the reduction, SBI Managing Director and Chief Financial Officer Diwakar Gupta said, “The bank has taken decision to cut interest rates on term deposits as liquidity is comfortable.” The decision to cut fixed deposit rates would help the bank improve margins, he said.
The Reserve Bank of India (RBI), in its quarterly monetary policy review on July 31, reduced Statutory Liquidity Ratio (SLR), the amount of deposits that have to be invested in government bonds and other liquid assets, by 1 percentage point.
RBI Governor D. Subbarao cut the SLR to 23 per cent, thereby releasing around Rs.68,000 crore of additional liquidity into the system, even as he left all the key interest rates unchanged in the anti-inflationary stance.
Soon after the policy review, the bank had cut lending rates on car and home loans by up to 0.5 percentage point.