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Wednesday, February 27, 2013

SBI hikes fixed deposit rates by 0.25% on select maturities

State Bank of India has raised the interest rates on fixed deposits by 0.25 per cent on select maturities with effect from March 1.

Of the total nine maturity periods, the rates have been revised upwards in four categories with a maturity period of over one year, SBI said in a statement today.

With the revision, the interest rate on 1-2 years term deposits would go up to 8.75 per cent from 8.50 per cent.

Similarly, term deposits for 2-3 years, 3-5 years and 5-10 years would earn a higher interest rate of 8.75 per cent. However, the bank has left the interest rate unchanged for deposits less than one year.

Earlier this month, the bank had cut the lending rate by 0.05 per cent, soon after the Reserve Bank cut its key policy rates.

After this marginal reduction, SBI’s base rate, or the minimum rate of lending, came down to 9.7 per cent from 9.75 per cent effective February 4.

In its third quarter policy review on January 29, the RBI had lowered the key short-term lending rate by 0.25 per cent and also injected Rs 18,000-crore liquidity through a similar reduction of Cash Reserve Ratio.

The repo rate, at which the RBI lends to banks, was eased after a gap of nine months as the central bank fought the stubbornly high inflation through tight money policy, leading to high interest rate regime.

Source: thehindubusinessline


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