SBI cuts fixed deposit rates by up to 100 bps

Five other banks, too, reduce their term deposit rates

State Bank of India (SBI), on Monday, slashed the interest rates on fixed deposits by up to 100 basis points across various maturities, a move that might prompt other lenders to follow suit.

The bank, however, has ruled out cut in the benchmark lending rate, saying it is offering one of the lowest rates in the industry.

The base rate or the minimum lending rate of SBI stands at 10 per cent. The base rate is the benchmark rate below which a bank cannot lend.

As regards deposit rates, SBI in a statement said, “The bank has decided to revise its retail term deposit rates across various tenors with reduction ranging from 0.25 percentage point to one percentage point.” The bank, however, has raised the interest rate on the 180-day fixed deposits scheme from the existing 7 per cent to 7.25 per cent.

The new rates would be effective from April 24, it said.

In the meanwhile, private sector Lakshmi Vilas Bank, too, reduced its fixed deposit rates on select maturities by 0.25 percentage point from April 20.

Kotak Mahindra Bank trimmed its base rate by 0.25 percentage point from 10 per cent to 9.75 per cent from April 26. All categories of loans (other than the exceptions permitted by the RBI) would, henceforth, be priced with reference to the revised Base Rate, Kotak Mahindra Bank said. — PTI

Our Kolkata Correspondent writes:

United Bank of India (UBI) and Allahabad Bank are the latest to join the rate reduction race.

UBI, on Monday, announced a reduction in its base rate by 15 basis points (bps) from 10.6 per cent to 10.45 per cent and its benchmark prime lending rate from 14.38 per cent to 14.6 per cent.

The bank also reduced its deposit rates ranging between 10 bps and 35 bps. The bank's Asset Liability Management Committee took these decisions which will take effect from today [Monday].

Allahabad Bank reduced both base rate and benchmark prime lending rate (BPLR) by 25 basis points. Consequently, the revised base rate will be 10.50 per cent while the revised benchmark prime lending rate (BPLR) will be 14.75 per cent. These will be effective May 1.

Our Mangalore correspondent writes:

Corporation Bank has revised its base rate for lending from 10.65 per cent to 10.50 per cent per annum with effect from May 1. The bank has reduced the rate of interest on term deposits by 25-200 basis points across different maturities with effect from April 25.