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.