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State Bank of India, the country's largest lender, has cut deposit rates by up to 0.50% starting February 18. While deposit rates for maturities of three to five years have been lowered by 0.25%, those for five years and above have been cut by 0.50%, SBI said in a filing to the BSE today. The bank currently offers an interest rate of 8.75% for three to five year deposits and 8.5% per annum for deposits exceeding five years. For bulk deposits of Rs 1 crore and above with a maturity period of 61 days to less than a year, SBI lowered rates by 0.75% to 7%.
Earlier this week, United Bank of India (UBI) and Canara Bank had revised interest rates. While UBI increased lending rates and cut interest on deposits, Canara Bank raised fixed deposit rates across maturities. UBI increased the base rate, or minimum lending rate, to 10.50% from 10.25%, becoming the first PSU bank to do so after the Reserve Bank of India raised policy rates in January.
Besides, UBI reduced its deposit rate to 8.5% from 8.75% previously for tenures of one year and above. Term deposits with Canara Bank with a maturity of 91 to 120 days would attract interest of 9.15% from 8.5% earlier. For periods ranging from 180 days to less than one year, the new rate would be 9.20% from the existing 8.75%. In its Third Quarter Review of Monetary of Policy, the RBI raised the key repo rate to 8% in a bid to curb inflation. The central bank's move is expected to translate into higher EMIs and push up borrowing costs for corporates. Private lender Kotak Mahindra Bank increased deposit rates in four different baskets earlier this month.
