The country’s largest lender State Bank of India has slashed interest rate on savings bank deposits by 5 basis points to 2.70 per cent.
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The revised rate is applicable for balances less than Rs 10 crore, according to the bank’s website.
This cut in savings bank deposits rate by SBI comes at a time when other lenders are raising rates on term deposits.
While banks have been quick in passing on the hike in repo rate to customers, the increase in deposit rates have been slow. Since May this year, the Reserve Bank of India (RBI) has increased the repo rate by 190 basis points (bps).
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According to Prakash Agarwal, director and head (financial institutions), India Ratings and Research, banks deposit rates are likely to increase faster in the rest of the financial year than in the first half as system liquidity tightens.
For balances of Rs 10 crore and above, SBI has raised the savings bank deposits rate by 5 bps to 3 per cent from 2.75 per cent.
The new rates are applicable from October 15, the bank said.
