SBI cuts interest rate for medium-term depositsby 0.25 per cent

[Dinesh jain]

State Bank of India (SBI) cut its interest rate for
medium-term deposits by 0.25 per cent on
Tuesday setting the stage for other banks to
follow the bellwether. "In view of abundant
liquidity coupled with slower-than-anticipated
credit pick-up, SBI has decided to cut rates of
one-tothree-year deposits by 0.25 per cent to
8.75 per cent per annum from 9 per cent," the
country's largest lender said in a statement. The
reduced rate will come into effect from
September 18.
SBI has also increased interest rates for shorter
tenor deposits of 180-210 days by 0.25 per cent
to 7.25 per cent per annum. The bank said that
with inflation trending down-consumer price
inflation for August eased to 7.80 per cent-the
rate adjustment will continue to ensure that the
depositors are compensated adequately with a
positive real rate on their deposits. SBI is
reported to be having liquidity in excess of
`50,000 crore in its vaults creating a challenge in
deploying funds, a senior SBI executive said.


SBI cuts interest rate for medium-term deposits by 0.25 per cent