Cut in SBI's savings rate: Banks' margin to benefit

Many banks are waiting for RBI's policy action to decide on savings bank rate after SBI's move

Commercial banks are waiting for the Reserve Bank of India’s (RBI’s) policy rate action to decide on tweaking their savings bank rate, after State Bank of India (SBI) decided to cut its savings rate on Monday.

Saving rate cut of 50 basis points could provide 10-15 basis point benefit to net interest margins (NIM) of banks, analysts said. RBI policy is due on Wednesday.

Top executives of two private banks said given the surplus liquidity in the system, the interest rates (both on the liabilities and lending side) are moving downwards. “SBI’s decision to reduce savings rate gives us a basis to