Mumbai, Aug 23 : With a view to protect the interest of Savings bank depositors, State Bank of India has decided not to reduce the savings bank interest rate further and hold the same at the existing level of 3 per cent for customers with balances above Rs 1 lakh.
Customers with savings balance upto Rs 1 lakh will continue to get the rate of interest at 3.50 per cent, as hitherto. RBI in its third Bi-monthly policy had reduced the Repo rate by 35 bps (from 5.75 per cent to 5.40 per cent) with effect from August 7, 2019. Had this rate cut been transmitted to savings bank (SB) deposits, the applicable returns on SB deposits with balances above Rs 1 lakh would have dropped to 2.65 per cent (275 bps below the Repo rate, i e 5.40 per cent) with effect from September 1, 2019.
With effect from May 1, 2019, SBI had linked the interest rate on Savings Bank deposits (for balances above Rs 1 lakh) with the Repo rate (i e 275 bps below Repo rate) without changing the rate of 3.50 per cent for SB balances upto Rs 1 lakh.
In view of the falling interest rate scenario and surplus liquidity, SBI realigns its interest rate on Term Deposits w e f August 26, 2019. Bank has slashed Retail Term Deposit rates by 10-50 bps across tenors as well as Bulk Term Deposit rates by 30-70 bps across tenors. UNI