Mumbai: The country’s largest lender, State Bank of India (SBI), on Monday, cut its fixed deposit rates by 40-50 basis points effective 9 March. One basis point is one-hundredth of a percentage point.
The move assumes significance in that SBI, by virtue of being a state-run organization as well as the largest bank in the country, sets the tone for others. Following its cuts, deposits for 1,000 days will now yield 8.50% instead of the current 9%. For deposits of 1001 days to less than three years, the interest rate will be 8.25%, from 8.75%. For under one year to less than two years, deposits will yield 8.10% from 8.50%, the bank said in a statement. Other banks are now expected to follow SBI’s lead and lower their own deposit rates. SBI cut interest rates on auto loans last week, prompting other banks to also cut rates.