Today State Bank of India made an announcement which is very important for every SBI account holder. SBI introduced a 2-tier saving bank interest rate structure from 31 July 2017, Monday.
Well, as per Bank’s clarification the accounts with more than Rs 1 crore deposit will earn interest at 4 percent per annum while Rs 1 Crore or below deposit will have 3.5 percent interest per annum.
SBI revised the rate of interest on the consideration of decline in the rate of inflation and high real interest rates.
SBI MD Rajnish Kumar said, “SBI had to cut saving interest rates as real interest rate was very high. We had two options; either to raise MCLR or cut savings bank interest rates,”
Since 2011, savings interest rates are static while before that rate was 3.5 percent. The bank would see at the end of August if savings bank interest rate cut impacts lending rates. Rate cut won’t result in outflows from savings deposits.
In SBI more than 90% savings accounts have deposits less than Rs 1 Crore of total 9 lakh savings accounts. SBI’s asset-liability committee meets during last week of every month to take a call on rates.
Earlier SBI had cut MCLR (marginal cost of funds based lending rate) by 90 bps from 1st January 2017.
The revision in saving bank interest rate would help bank to maintain MCLR at the existing rates. It also benefits many retail borrowers in SMEs, agricultural and housing.
PSU Banks were trading higher upto 4% after SBI cut saving bank interest rates.
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