State Bank of India (SBI) on Tuesday hiked the savings deposit rates by 30 bps for large accounts, a day after lowering the deposits for small savers under Rs 10 crore in savings deposits by 5 bps to 2.70 per cent per annum, the PTI reported.
SBI, the nation’s largest banker, said the new rate of 30 bps more on deposits, is applicable for Rs 10 crore and above, and is effective from October 15, according to the report.
Banks have been noticing flight of money to other asset classes even as they were lending more. For the past few months, deposit growth has not been keeping pace with credit growth that in the first half averaged at 14.8 per cent, while deposits have been much lower at 9.5 per cent only. In the past several years, deposits have been growing in high single-digit, however, credit has been negative or in low-single digit.
SBI said while interest rates for saving bank deposits below Rs 10 crore remains unchanged at 2.70 per cent, down 5 bps, those Rs 10 crore or above will attract 30 bps more at 3 per cent. As of June 2022, SBI has a deposit base of over Rs 40.46 lakh crore with the Casa ratio of 45.33 and advances of over Rs 29 lakh crore.
SBI commands a market share of 33.3 per cent (at over Rs 6 lakh crore in outstanding) and 19.3 per cent in home loans and auto loans, respectively.
On Monday, the bank also increased lending rates (marginal cost of funds based lending rates or MCLR) 7.95 per cent, up by 25 bps from previous rate, which came to effect from October 15, for the benchmark one-year tenor, which is the rate against which most of the consumer loans are tied to.
SBI has also raised the two- and three-year tenor MCLRs to 8.15 per cent and 8.25 per cent respectively from 7.90 per cent and 8 per cent. The overnight, one-, three- and six-month rates have been raised in the range of 7.60-7.90 per cent. Both the rate hikes are following the RBI increasing the key repo rate for the fourth time in a row this fiscal year by another 50 bps to 5.90 per cent, taking the cumulative increase by 190 bps since May.