State Bank of India raises term deposit rates by 25 bps

State Bank of India, the country’s largest lender, has hiked the interest rate by up to 25 basis points (bps) in some of its term deposits.

Those with a tenor of two to less than three years have been raised by five bps to 6.65 per cent. The hike for those between a year to less than two years is 25 bps, also to 6.65 per cent. A senior executive said: “Money in these two buckets (tenors) has substantial share in banks’ deposit base. We would like to retain the amounts when competition for resources is intensifying.”

SBI deposits as a whole grew nearly 4.7 per cent from Rs 25.85 trillion in March 2017 to nearly Rs 27.1 trillion as on end-March 2018. Domestic term deposits grew 1.8 per cent to around Rs 14.1 trillion.

Its average cost of deposits declined by 54 bps over a year, to 5.3 per cent as on end-March. It began to move up since the third quarter of FY18, reflecting a hardening of rates in the system. 

SBI had raised its rates on bulk deposits (those above Rs 10 million) in the second half of the financial year.