State Bank of India has decided to up retail fixed deposit rates by up to 80 basis points (bps), with effect from October 22, in the backdrop of deposit growth trailing credit growth in the banking system.
India's largest bank has effected the highest increase of 80 basis points in the 211 days to less than one year bucket to 5.50 per cent from 4.70 per cent.
The highest interest rate the bank will offer is 6.25 per cent (5.65 per cent) in the two-years to less than three-year maturity bucket.
The bank will offer 6.10 per cent interest rate on three maturity buckets—one year to less than two-years (current rate: 5.60 per cent), three years to less than five years (5.80 per cent), and between five years and up to 10 years (5.85 per cent).
The new interest rate for deposits in the 46 days to 179 days and 180 days to 210 days maturity buckets will be 4.50 per cent (4 per cent) and 5.25 per cent (4.65 per cent), respectively.
The bank said it will offer 80 bps higher interest to senior citizens over that offered to general public in the five years and up to 10 years. maturity bucket
There is pressure on banks to mobilise resources to fund credit growth.
According to RBI'S latest monthly bulletin, aggregate deposits with banks grew by 8.7 per cent (9.4 per cent a year ago). Scheduled commercial banks’ (SCBs’) credit accelerated to 16.4 per cent as on September 23, 2022 (6.7 per cent a year ago), which is the highest since October 18, 2013 (16.3 per cent).