SBI slashes interest rate on savings accounts ahead of RBI’s monetary meet
July 31, 2017
State Bank of India slashes interest on savings account deposits by 50 basis points to 3.5 per cent on balance up to Rs 1 crore as compared to 4 per cent earlier.
“The decline in the rate of inflation and high real interest rates are the primary considerations warranting a revision in the rate of interest on savings bank deposits,” SBI said in a statement.
SBI’s rate cut on Monday comes just two days ahead of the Reserve Bank of India’ monetary policy meet on Wednesday where most analysts expect India’s central bank to cut key interest rates.
SBI introduced a new two-tier interest rate structure on savings accounts, effective from July 31.
The largest public sector bank through its official release, revealed that although accounts with a balance of above Rs 1 crore will continue to earn interest at four percent per annum, those with balance lower than the specified amount will attract an interest rate of 3.5 percent per annum.
About 90 per cent of SBI’s savings bank accounts have balances under Rs 1 crore.
SBI said it took this step in due consideration of a decline witnessed in inflation rates, along with high real interest rates.(Agencies)