Sunday, July 1, 2012

SBI raises deposit interest rates by 0.25%

In a surprise move, country's largest bank SBI today increased interest rates on select fixed deposits by 0.25 per cent.

Deposits under Rs 15 lakh for a period of three years but than five years will fetch an interest rate of 9 per, up from 8.75 percent, State Bank of India (SBI) said in a statement issued here.

The revised interest rate will be applicable from July 1, it said.

The move, which is likely to trim SBI's profits, comes as a surprise because the bank had earlier this month cut deposit rates by 0.25 per cent in select maturities. This followed the Bank's cut in lending rates by 0.5 per cent in April a cumulative cut in cash reserve requirements to the tune of 1.25 per cent this year.

A hike in interest rate by SBI is surprising also because it followed a cut of 0.20 per cent in base rate by private lender HDFC Bank yesterday.

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