State Bank of India (SBI) yet again hiked its deposit rates, this time on deposits over two years for retail customers and also in 1-2 years category for deposits over Rs 1 crore.
SBI, which accounts for more than a fifth of India’s banking assets, raised the rates by 10-25 basis points (bps).
This comes just a few days before the Reserve Bank of India's monetary policy announcement that will decide on key policy rate on April 5.
SBI's new rates for deposits less than Rs 1 crore in the "2 years to less than 3 years" were increased from 6.50 percent to 6.60 percent, deposits from "3 years to less than 5 years" will get 6.70 percent from earlier 6.50 percent and deposits kept for "5 years to up to 10 years" will get 6.75 percent (up from 6.50 percent).
The interest rate payable to SBI staff and SBI pensioners will be 1 percent above the applicable rate. The rate applicable to all Senior Citizens and SBI Pensioners of age 60 years and above will be 0.50 percent above the rate payable for all tenors to resident Indian senior citizens, SBI said on its website.
The rest of rates remain the same as revised in February ranging from 5.75 percent to 6.40 percent on deposits kept for less than 1 year.
For bulk deposits from Rs 1 crore and above, the rates for "1 year to less than 2 years" were revised to 7 percent from 6.75 percent.
Being the country's largest lender, SBI has usually been the leader in revising interest rates on both lending and deposit front.
On February 28, SBI had hiked its retail and wholesale deposit rates by 10 to 50 bps across various maturity baskets.
A few days later, on March 1, SBI had also raised its marginal cost-based lending rates (MCLR) by 10-25 basis points across most maturities, with immediate effect.
The key 1-year MCLR was hiked to 8.15 percent from 7.95 percent.
Even as RBI has kept key policy rate unchanged in the last three review meetings, rate cycle has moved north as bond yields have been rising (except for Tuesday owing to lower government borrowing). At the same time, banks are struggling to meet capital requirements as they have to set aside more provisions towards rising bad loans which could impact their profitability.
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