Private sector lender Kotak Mahindra Bank (KMB) on Monday slashed the interest rate on savings deposits by a further 0.50 per cent. The bank has cut rates twice last month on its deposit rate offering on the savings accounts.
From Monday, daily balance of over Rs 1 lakh will earn 4 per cent interest as against the 4.50 per cent earlier, while those under that threshold will earn 3.50 per cent, the bank said.
The revisions are applicable for deposits in residents accounts only, it said.
It can be noted that deposit rates across the system are dipping due to a combination of an interest rate lowering by the Reserve Bank of India and also a lack of loan growth where the money can be deployed.
Largest lender SBI offers an interest rate offering of as low as 2.75 per cent on the savings bank deposits, while others like Yes Bank, which also has an aggressive strategy, have hinted at the possibility of lowering the rates in near future.
During a recent media call, Uday Kotak, the lender's managing director, had counted deposit accretion as among the key focus areas for the bank amid the COVID-19 pandemic crisis.
KMB was among banks - like Yes Bank, IndusInd Bank and DBS - to offer higher pricing on savings deposits that had peaked at 7 per cent for the past many years.