India's largest lender, State Bank of India has dismissed the allegations of cartelisation in fixing the savings deposit rates by big banks despite the RBI deregulating this over a year.
Mr. Diwakar Gupta, SBI Managing Director and Chief Financial Officer dismissing the allegation said that the bank's decision of keeping the savings deposit rates unchanged is a purely commercial one and it does not amount to cartelisation.
State Bank of India and its five subsidiaries, which comprises of 25 per cent of the banking system, have not changed their savings deposit rates. At present, it offers 4 per cent.
The interest rate on savings accounts was only regulated product in the banking till Reserve Bank of India deregulated it.
After the deregulation, only two banks, Kotak Mahindra and Yes Bank raised the saving deposit rates to 6 and 7 per cent respectively. The two banks were also facing problems in raising the low-cost CASA (Current Account, Savings Account) deposits in the past.
City based, Saraswat Bank had also increased the deposit rate to 7 per cent. Apart from this all the other banks are offering 4 per cent on the savings deposit annually to all the saving account holders. Earlier in 2011, the saving deposit rate was 3.5 per cent.