New Delhi: Ahead of RBI’s mid-quarter review of the monetary policy later this month, country’s largest lender State Bank of India (SBI) today slashed fixed deposit rates by 0.25 percent across select maturities.
The bank has decided to revise its retail term deposit interest rates with a reduction by 0.25 percent in tenors up to 240 days, SBI said in a statement. The new rates would be effective from tomorrow. The bank had earlier cut interest rate on loans given to small and medium enterprises (SMEs).
RBI is scheduled to announce mid-quarter review of monetary policy on June 18. It is expected that the central bank may cut policy rate by by 0.25 per cent to spur growth. Even RBI Deputy Governor Subir Gokarn had said that there is a room to ease policy stance in the light of moderating growth and falling crude oil prices. With the revision, the interest rate on 7-179 days fixed deposit would come down to 7 per cent from the existing 7.25 percent.
Diwakar Gupta, managing director and chief financial officer, State Bank of India said, this deposit rate cut was only a minor readjustment. “This is also to signal that we want to play along with efforts for a softer interest rates regime.” Justifying this move, Gupta also said the bank is reasonably comfortable on the liquidity front and would cut rates on advances and deposits only when the overall economy warrants it.
Even for 180 days term deposit, the interest rate would be 7 per cent, down 0.25 per cent. The base rate or minimum lending rate of SBI stands at 10 percent. Base rate is the benchmark rate below which a bank cannot lend. The bank last revised its fixed deposit rates in April. It slashed interest rates on fixed deposits by up to 1 percent across various maturities.
The decision had come following the RBI’s decision to cut key interest rate by 0.5 per cent to 8 per cent in its annual credit policy during April.