SBI slashes term deposit rates by 0.25%
By Neelima Shankar
May 5, 2009
Print    Email    RSS   

With RBI trying to follow a soft interest rate regime, State Bank of India (SBI) takes the signal and announces a 25 basis points cut in its term deposits rates across various maturities. This is the second time within three weeks that SBI has slashed the deposit rates.

An executive with SBI said that abundant liquidity has enabled the bank to revise down the interest rates. "There is lot of liquidity, while credit off-take remains subdued. This has provided us the opportunity to revise deposit rates," said the executive.

As per the revision, the peak deposit rate of the 1,000 day deposit scheme has been brought down to 8% from 8.25%. This scheme mopped up more than Rs 1,000 crore a day in the month of October and November 2008. But as the interest rate offered under the scheme have been coming down, per day mop up has declined down to Rs 500 crore.

Meanwhile the interest rate on the 15-45 days stands at 3.75% against 4%. Similarly 46-90 days deposit will earn a yield of 4.75% as compared to the previous yield of 5% per annum and for 91-180 days the rate has been declined to 6% from 6.25%.

Further interest rates on deposits with a maturity of 181 days to less than one year and one year to less than two years have been slashed to 6.75% from 7% and 7.5% from 7.75% respectively.

So far SBI has cut its deposit rates by around 100-150 basis points in 2009. It has been done to ensure that its net interest margin remains above 3%.

The falling policy rates along with adequate liquidity in the system has resulted in deposit rate cuts by most lenders.

Even Punjab National Bank has reduced its benchmark prime lending rate (BPLR) by 50 basis points to 11%.

The revised deposit rates of SBI are effective from May 4th.


(Comments Posted : 0) Post Your Comments
Show All Comments
 Select a product:

 Select a product:

Plan your tax, don’t evade it
Gold ETFs or Gold Funds: Which One Should...
Medical Insurance: Save tax along with health
Carnival of Indian Personal Finance Blogs #3
Fixed deposits in India: Benefits,...

MEXING: CaℒL Giℛℒ In Hoshiarpur 09855660911...
Sakeela.CaℒL Giℛℒs In Kharar 0985566O911...
NANGAL: CaℒL Giℛℒ In Una 09855660911 Escoℛt...

Federal Bank launched V connect for its customers Feb 12, 2015
Andhra Bank on expansion mode Feb 11, 2015
Dena Bank earned a profit of 13%. Feb 9, 2015
Banks expected to cut down the rates Feb 5, 2015
RBI kept the rates unchanged Feb 4, 2015
News Archive