Mumbai: The nation’s largest lender State Bank of India (SBI) on Monday slashed interest rate on savings deposits by 50 bps to 3.5 percent on balance up to Rs 1 crore, citing “muted credit demand and very high real interest rates”.
The new rate effective today is the lowest in the last six years, and comes just two days ahead of the Reserve Bank of India’s third bi-monthly policy review and will impact over 90 percent of its millions of small savings account-holders. In April, the bank had increased a slew of service charges, such as non-maintenance of minimum balance, NEFT charges, for customers.
The move, which may lead to a rate war, will help the bank make an additional gain of around Rs 2,500 crore. SBI caters to over 42 crore customers of which nearly 2 crore use mobile banking. Around 3.27 crore are Internet banking users, 1.03 crore are State Bank Buddy users and 34.5 crore are debit card holders
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