Deposit rates hiked between 15-100 basis points by SBI

14 Dec 2022 , 11:20 AM

State Bank of India (SBI) increased interest rates by 15-100 basis points (bps) on various maturities for both domestic retail deposits and bulk deposits as of Tuesday due to increased competition among banks for resource mobilization.

For retail deposits, SBI is providing a peak deposit rate of 6.75% on two-time horizons: one to less than two years and two to less than three years.

Deposit rates were raised by 50 basis points for buckets of two to under three years. The rate rise for the category of one year to less than two years was 65 basis points.

SBI said that it would pay 4.25% instead of 3.5% for bulk deposits made between 7 and 45 days. One year to less than two years will now attract a rate of 6.5% in bulk deposits, up from a rate of 6%. In contrast to the previous rate of 5.25%, two to less than three years will have a 5.75% rate. The rates range from three to five years, and they are also 5.75% (5.25% old).

According to PSB executives who talked to Business Standard, there was limited liquidity, and if SBI had difficulties, medium-sized and small lenders had it even worse. This will cause banks to revise their rates upward in the current and following quarter (Q4FY23).

The RBI raised the policy repo rate last week by 35 basis points to 225 basis points. Governor of the RBI, Shaktikanta Das made reference to the fact that while loan growth the year before was weak, deposits were expanding at a higher base.

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