SBI cuts savings bank account interest rate by 25 bps to 3.25%, slashes fixed deposits rates by up to 30 bps

In view of the adequate liquidity in the system, the State Bank Group on Wednesday revised interest rate on savings bank deposits (with balances up to Rs 1 lakh) from 3.50 percent to 3.25 percent effective 1 November. SBI, which controls a fifth of the system, has also slashed its retail term deposits and bulk term deposits rates by 10 bps and 30 bps respectively for one-year to less than two-years effective 10 October.

State Bank Of India cuts interest rate on savings deposits with balance of upto Rs 1 lakh by 25 bps to 3.25% w.e.f November 1; cuts retail & bulk term deposit interest rates by 10 & 30 bps respectively for 1 year to less than 2 year tenor pic.twitter.com/mvX0hbJDg4

— CNBC-TV18 (@CNBCTV18Live) October 9, 2019

The bank also revised its marginal cost of funds-based lending (MCLR) rates by a marginal 10 basis points across all tenors but steeply revised down the pricing on savings deposits under Rs 1 lakh by a 25 bps to 3.25 percent. This is the sixth reduction in the lending rates by the largest lender since April. [caption id=“attachment_4201361” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] While the MCLR reduction is effective 10 October, the revision in savings bank deposits rates will be from 1 November, the bank said in a statement. The one-year MCLR, to which all the lending rates, barring those retail loans linked to the repo rate since 1 October, are linked to, is set at 8.05 percent as against 8.15 percent earlier. “In view of the festival season and extending the benefits to customers across all segments, we have reduced our MCLR by 10 bps across all tenors,” the bank said in a statement. MCLR reduction follows a 25 bps cut in the repo rate by RBI last week. But the effective rate reduction is still way behind the RBI cuts, which has in five successive actions lowered the repo rates to a decadal low of 5.15 percent. The bank has also adopted repo rate as the external benchmark for all floating rate loans for MSMEs, and retail products like housing and auto loans from 1 October. In July, SBI had introduced floating rate home loans. (With PTI inputs)