SBI cuts rates on loans & also special FD scheme

One basis point is a hundredth of a percentage point.

SBI is offering 7.05% as interest on deposits with 444-day tenor. The 444-day deposits were introduced in July 2024 at an interest rate of 7.25% for a limited period. On regular retail deposits, the highest rate offered is 6.90%.

The new rate, under the special scheme called Amrit Vrishti, will come into effect from Tuesday, April 15. The rate offered for senior citizens is higher at 7.55% and 7.65% for super senior citizens, above 80 years of age.

In April 2023, the country’s biggest mass lender had introduced 400-day deposits at 7.10%. Both the special deposit schemes were valid until March 31.

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In FY25, a bunch of banks, including SBI, rolled out special deposit schemes, offering attractive and higher rates in a bid to mobilize retail deposits. Slowing deposit growth dogged lenders in the face of credit demand.The bank has reduced interest rates on loans linked to external benchmarks by 25 basis points with effect from April 15. However, it has kept the marginal cost of fund-based lending rate unchanged in the range of 8.20-9.10%.SBI’s EBLR will be reduced to 8.65% from 8.90%, while repo-linked lending rate will come down to 8.25% from 8.50%.

SBI’s revision in lending rates and deposit rates in the background of improving liquidity in the banking system, currently in surplus, and reduction in the benchmark repo rate by the Reserve Bank of India.

Analysts said that SBI’s move also signals that mobilizing deposits, particularly retail liabilities, remains a challenge for banks. Other banks, particularly state-owned lenders, may follow suit.

Indian Bank has already extended its special deposit scheme till June-end.

SBI has also lowered rates on some retail deposits of below Rs3 crore by 10 bps with effect from April 15. Rates on fixed deposits maturing in one year to less than 2 years have been reduced to 6.70% from 6.80%, while those on two years to less than three years have been cut to 6.90%.