State Bank of India has upped the interest rate on deposits in the three-to-five year maturity slab to 9 per cent.
The 25 basis points increase in the interest rate (from 8.75 to 9 per cent) suggests that India’s biggest lender is eyeing stable, long-term deposits.
In a statement, SBI said the interest rate hike is effective July 1, 2012. It has, however, left interest rates on all other maturity slabs unchanged.
In late April, the bank had reduced retail term deposit rates by 25-100 basis points across the board. Earlier this month, it pared short-term retail term deposit rates on tenors up to 240 days by 25 basis points. (A basis point is one hundredth of a percentage point.)
Among the nine maturity slabs, the bank is offering the highest rate of 9 per cent on deposits in three slabs — 1-2 years; 2-3 years; and 3-5 years.
As on March-end 2012, retail term deposits at Rs 4,12,285 crore accounted for 42 per cent of SBI’s domestic deposits of Rs 9,82,214 crore.
Union Bank CUTS lending rates
In a statement, Union Bank of India has cut interest rates on loans to the micro and small enterprise (MSE) sector by up to 300 basis points.
What this means is that depending on the MSE’s credit rating, the bank will reduce its mark-up over the base rate (10.50 per cent) by up to 300 basis points. Base rate is the minimum lending rate below which banks cannot lend.