State Bank of India (SBI), India’s largest bank, has announced a cut of up to 1% in interest rate for fixed deposits across maturities, a development which may prompt other banks to follow suit.
“The new rates would be effective from September 7,” State Bank of India said in a statement.
The Managing Director (MD) and Chief Financial Officer (CFO) of State Bank of India (SBI) Mr. Diwakar Gupta said, “The bank has taken decision to cut interest rates on term deposits as liquidity is comfortable.”
The decision to cut fixed deposit rates would help the bank improve margins, he said.
For deposits between 241 days and one year, the downward revision is 1%. The new rate would be 6.5% as against 7.5%.
With the revision, the interest rate on 7-90 days fixed deposit would come down to 6.50%, from 7%.
Similarly, term deposit 91-179 days would be down by 0.5%, at 6.50% and 180 days fixed deposits would also attract 6.50% interest rate.
Fixed deposit with maturity of 181-240 days would now provide interest rate of 6.50%, down from 7.25%.
For one year to less than two year maturity period fixed deposits, the new rate will be to 8.5% as against 9%, down by 0.5%.
At the same time, interest rate for fixed deposits with maturity period between two-three years and three-five years has been slashed by 0.5% to 8.5%.
However, the bank has left interest rate unchanged at 8.5% for term deposit of 5-10 years.