New Delhi, Sept 5 (PTI): State Bank of India, the largest bank of the country, on Wednesday announced reduction in interest rate on fixed deposits by 50 basis point for most of the maturity periods.However, for deposits between 241 days and one year, the downward revision is 100 basis point. The new rate would be 6.5 per cent as against 7.5 per cent.
Of the total 9 maturity periods for fixed deposits, 50 basis point downward rate revision is for 6 categories.
The new rates would be effective from September 7, SBI said in a statement.
With the revision, the interest rate on 7-90 days fixed deposit would come down to 6.50 per cent, from 7 per cent.
Similarly, term deposit 91-179 days would be down to 6.50 per cent and 180 days fixed deposits would also attract 6.50 per cent interest rate.
Fixed deposit with maturity of 181-240 days would now provide interest rate of 6.50 per cent, down from 7.25 per cent.
For one year to less than 2 years maturity period fixed deposits, the new rate will be to 8.5 per cent as against 9 per cent.
At the same time, interest rate for fixed deposits with maturity period between 2-3 years and 3-5 years has been slashed by 50 basis point to 8.5 per cent.
However, the bank has left interest rate unchanged at 8.5 per cent for term deposit of 5-10 years.
Besides, SBI has decided to revise interest rates on non- resident fixed deposits for tenors of 1-5 years to 8.5 per cent from existing 9 per cent effective September 7.
Last month, the bank revised interest rates on domestic term deposits of maturity of five years and more by 25 basis point to 8.50 per cent.
Reserve Bank of India in its quarterly monetary policy review on July 31 reduced Statutory Liquidity Ratio (SLR), the amount of deposits that have to be invested in government bonds and other liquid assets, by 1 per cent.
RBI Governor D Subbarao cut the SLR to 23 per cent, thereby releasing around Rs 68,000 crore of additional liquidity into the system, even as he left all the key interest rates unchanged in the anti-inflationary stance.
Soon after the policy review, the bank had cut lending rates on car and home loans by up to 50 basis point.