SBI cuts interest rates on deposits by 0.25%, PNB increases it to 9%
MDT/PTI 02 August 2012

While SBI cut interest rate on deposits by 0.25% to 8.5%, other state-run lender PNB has increased its deposit rates to 9% from 8.75%


Mumbai: State Bank of India (SBI) on Thursday lowered interest rates on domestic term deposits of maturity of five years and more by 0.25% to 8.5%, reports PTI.
 
"The bank has decided to revise downwards the interest rate on domestic term deposits for tenors five years and above to 8.5% with effect from 7 August 2012," SBI said in a filing to the BSE.
 
The country's largest bank offers an interest rate of 8.75% on deposits below Rs15 lakh, and 9% on deposits from Rs15 lakh to less than Rs1 crore.
 
Punjab National Bank (PNB), however, has increased the interest rates on deposits by 0.25% to 9% for maturity of one year with effect from today.
 
"The bank has decided to increase rate of interest on single domestic deposit of less than Rs 1 crore from 8.75% to 9% for maturity of one year," PNB said in a separate filing to the BSE.
 
PNB further said that NRE term deposits will also attract an interest rate of 9%, as applicable to domestic term deposits.
 
SBI yesterday announced reduction in lending rates by 0.5% on home and auto loans.
 
The decision to alter deposits rates within days of Reserve Bank announcing its first quarterly monetary policy review. The central bank, despite pressure from India Inc, decided to keep the key interest rate unchanged in view of high inflation.
 
RBI, however, had lowered the statutory liquidity ratio (SLR), the portion of deposits that banks are required to invest in government bonds, by 1% to 23%.
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