Country's largest lender, State Bank of India (SBI), has decided to cut interest rates on retail term deposits by 25 bps for tenures up to 240 days. The new rates that are applicable only on deposits below Rs 15 lakhs will be effective from June 8, 2012.
As per the revised rate card, deposits maturing between 7-180 days will fetch 7% and 180-240 days will fetch 7.25% for customers. Deposit rates for tenures above 240 days and for deposits above Rs 15 lakhs to Rs 1 crore have not been changed.
This is the second round of reduction in deposit rates by the lender since the policy rate cut announced by the Reserve Bank of India on April 17. The central bank is scheduled to review the monetary and credit policy on June 18, 2012.
Even RBI Deputy Governor Subir Gokarn had said that there is a room to ease policy stance in the light of moderating growth and falling crude oil prices.
Even for 180 days term deposit, the interest rate would be 7%, down 0.25%.
The base rate or minimum lending rate of SBI stands at 10%. Base rate is the benchmark rate below which a bank cannot lend.
