State Bank of India (SBI) is revising interest rates on retail term deposits, below Rs.1 crore, with effect from September 18.
As per the revision, there will be a reduction of 25 basis points on the rate on deposits in the maturity bucket of 1 year to less than three years. The new interest rate will be 8.75 per cent.
In a filing to Bombay Stock Exchange on Tuesday, the bank said on deposits for 180-210 days the rate will be 7.25 per cent. The existing rate is 7 per cent.
Interest rates on all other maturity buckets remain unchanged, as per details provided in the filing.
State Bank of India on Tuesday cut its interest rate offering for medium-term deposits by 0.25 percentage points to 8.75 per cent, citing slower-than-expected pick-up in advances.
However, it increased rates for shorter tenor deposits of 180-210 days by 0.25 percentage points to 7.25 per cent per annum.
PTI reports:
“In view of abundant liquidity coupled with slower-than- anticipated credit pick up, State Bank of India (SBI) has decided to cut the deposit rates by 0.25 percentage point to 8.75 per cent,” the bank said in a statement.
The bank added that with the inflation trending down — consumer price inflation for August eased to 7.80 per cent — the rate adjustment will continue to ensure that the depositors are compensated “adequately with a positive real rate on their deposits.”
It can be noted that banks have been complaining about issues in credit offtake, even as the sentiment has improved following the formation of a stable government at the Centre. The system’s year-on-year increase in credit stood at 10.94 per cent for the fortnight ended August 22, which is almost on a par with the 10.61 per cent observed in 2009 in the aftermath of the financial crisis.