SBI hikes interest rate for deposits below Rs.15 lakh

State Bank of India (SBI) has increased retail term deposit interest rates by 0.25 percentage points for three years to less than five years from 8.75 per cent to 9 per cent with effect from July 1. This rate will be applicable for deposits below Rs.15 lakh, SBI said in a release . All other rates will remain the same.

Union Bank

Meanwhile, another public sector bank, Union Bank of India, has reduced interest rates for the micro and small enterprises (MSE) sector up to 300 basis points under various slabs with effect from July 1. The bank is aiming to achieve substantial credit growth to the MSE sector in the current financial year.

Earlier, SBI had also reduced its lending rates between 0.5 percentage points to 3.5 percentage points for small and medium enterprises (SME) and the agriculture sector in mid-June prior to the first mid-quarter review of the monetary policy by the RBI on June 18. SBI’s Base Rate is at 10 per cent.

“The revised interest rate structure for micro and small enterprises is quite competitive and attractive. This will be very much affordable to micro and small units and will help the bank to boost its MSE credit portfolio,” Union Bank of India stated in a release. At present, the Base Rate of Union Bank of India is 10.50 per cent. Other measures being the targeted credit flow to MSME driven through 350 MSME-focussed branches known as Business Banking Branches and through more than 30 clusters identified to cater to the credit requirement for exclusive activities under micro and small enterprises, it added.

Any credit of a bank is linked to the bank’s base rate and varies according to the credit rating of an entity. SBI had also cut its interest rate on loans to exporters by 50 basis points with effect from June 23.

The RBI had increased the limit of export credit refinance from 15 per cent of outstanding export credit of banks to 50 per cent to augment liquidity and encourage banks to increase credit flow to the export sector, while all other indicative policy rates were kept unchanged.

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Printable version | Mar 8, 2021 3:28:52 AM |

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