With the huge influx of cash following demonetisation drive of Narendra Modi government, SBI on Wednesday slashed bulk deposit rates by up to 1.9 per cent taking advantage of the surge in deposits following demonetisation.
The reduction in deposit rate by the country’s largest lender may be precursor to a lending rate cut.
SBI has reduced interest rates on bulk deposits ranging between Rs 1-10 crore. The new rates are effective tomorrow, SBI website showed.
With the revised interest rates, the 180-210 day fixed deposit will attract 1.90 per cent lower interest rate at 3.85 per cent as against the 5.75 per cent earlier.
For fixed deposits between 1 year to 455 days, the rate has been lowered to 6 per cent from 4.25 per cent.
For FDs between 7 days to 45 days, the new rate will be 1.25 per cent lower at 3.75 per cent.
Earlier this month, SBI had cut fixed deposit rates for less than Rs 1 crore on select maturities by up to 0.15 per cent.
On Sunday, Prime Minister had said: “Over Rs 5 lakh crore deposited with banks are not going to be kept idle. Banks will have to extend loans for all sorts of economic enterprise... for which they will have to bring down their interest rates.”