SBI cuts interest rate on savings bank deposits. Will other banks follow?

SBI

Savings bank deposits with SBI since June 2011, as with most other banks, earned an interest of 4%

LATEST NEWS   :  State Bank of India (SBI) has introduced a two-tier interest rate structure on savings bank deposits. With effect from July 2017, a savings bank balance of over Rs 1 crore will earn an interest rate of 4% per annum (p.a.), while the ones with Rs 1 crore or less will earn an interest rate of Rs 3.5% p.a. The move sent the stock soaring 4% in intra-day deals to Rs 313 levels on the Bombay Stock Exchange (BSE).

 

“The decline in the rate of inflation and high real interest rates are primary considerations warranting a revision in the rate of interest on saving bank deposits,” SBI said in a release.

 

 

“This is a step in the right direction and I expect more banks to cut savings bank interest rates going ahead. That apart, SBI will also save on the interest costs going ahead. This is getting reflected in the stock reaction post the development,” said says Kunj Bansal, ED & CIO at Centrum Wealth Management.

 

Savings bank deposits with SBI since June 2011, as with most other banks, earned an interest of 4%. For SBI, around 90% of the deposits came under less than Rs 1 crore category, SBI said in an analyst concall.

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