SBI snipped interest rates by 25-50 basis points
SBI snipped interest rates by 25-50 basis points – SBI (State Bank of India) has snipped interest rates by 25-50 basis points on deposits up to 5 years time period. After several months, this is for second time that India’s biggest bank has snipped term deposit rates.
Recently, in last month, the bank had lowered term deposit rates by 25 basis points all across the maturities. The recent interest rate cuts on term deposits will be effective from November 9. Though, SBI has imparted long term deposits interest rates in 2 maturity buckets, one for 5 years to less than 8 years i.e. 7.25% and other is up to 10 years i.e. 7.50%, unaltered. Along with snipped term deposit rates, the bank also declared extension of its 8% home loans campaign up to March 31, 2010 complying very good response with the scheme.
The home loans portfolio has been revived by the bank up to 15% from Rs 54,063 crore as of March-end 2009 to Rs 62,338 crore as of September-end 2009. As per analysts, State Bank of India has trimmed term deposit rates to save its net interest margin in the confront of slow credit pick up and liquidity glut originating from the heavy inflow of retail term deposits, which on an average raised by Rs 8,075 crore a month in the starting 6 months of the year.
NIM lower – SBI net interest margin was lower in the first half of FY2010 at 2.43% as compared to 3.16% in the substantial half last year. In second quarter of FY2010, growth advancement has been seen reduced at Rs 30,444 crore from Rs 51,020 crore in FY2009.
The deputy MD and Chief financial officer of SBI, Mr. S.S. Ranjan stated, “Deposit rates are a function of liquidity. We have been gradually bringing down the term deposit rates. Our NIM will improve by 2-3 basis points following the marginal cut in term deposit rates.”
On last Thursday, PNB (Punjab National Bank) declared that it will snip interest rates on term deposits by 25 to 50 basis points in selected maturity buckets. Along with this recent reduction, the highest interest rate proffered by PNB will be 7% on term deposit of 3 years and above.
Home loan scheme extended – Till March 31, 2009, SBI has broadened its special home loan scheme under its ‘My Home’ campaign. Due to good response ever seen, the bank commenced the scheme which was launched on August 8 for a 3 month limited period has been extended.
Along with SBI bank, Axis bank has also acquainted a special home loan scheme proffering a fixed interest rate of 8% in the corresponding first year and a floating interest rate from second year ahead. This offer will be open till December 10.
In addition, Bank of Rajasthan also cuts its home loan rates to 7.5% in the first year for a loan taken of less than Rs 30 lakh.
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