SBI or State Bank of India, the country's largest bank, cut its term deposit rates in select maturities from April 29, 2017. The government's move in November last year to withdraw Rs 500 and Rs 1,000 bank notes from the financial system led to a "huge inflow of current account and savings bank deposits", State Bank of India (SBI) chief financial officer Anshula Kant told NDTV Profit, while explaining the rationale behind her bank's decision to lower its deposit rates.
"Post-demonetisation gradually some of the deposits have started to go out of the system and roughly for us about 40 per cent of the deposits have gone out from the bank. We still have 60 per cent. That is one thing," she said.
"We were not very keen to increase the MCLR (marginal cost of funds-based lending rates) at this point. As cost of deposit goes up, it has an upward pressure on the MCLR as well. To maintain MCLR for our borrower customers where it is, we have tweaked the rates in certain longer deposit buckets."
Marginal cost of funds-based rate is a new benchmark which banks are using for pricing their home and car loans. They add a margin above their MCLR to price retail loans.
According to SBI's new rates, for two to less than three-year deposits, the bank will offer a rate of 6.25 per cent as compared to 6.75 per cent earlier. For the similar maturity, the deposit rates for senior citizen have been cut to 6.75 per cent from 7.25 per cent.
SBI has not changed its marginal cost of funds-based lending rates. Its one-year MCLR is at eight per cent.
She further said that "there has been a slight uptick in the cost of deposits" since its mega merger last month.
State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, besides Bharatiya Mahila Bank (BMB), became part of SBI with effect from April 1.
After the merger, SBI entered the league of top 50 global banks with a balance sheet size of Rs. 41 lakh crore, 2.77 lakh employees, 50 crore customers, over 22,500 branches and 58,000 ATMs, it said.
SBI or State Bank of India, the country's largest bank, cut its term deposit rates in select maturities from April 29, 2017. The government's move in November last year to withdraw Rs 500 and Rs 1,000 bank notes from the financial system led to a "huge inflow of current account and savings bank deposits", State Bank of India (SBI) chief financial officer Anshula Kant told NDTV Profit, while explaining the rationale behind her bank's decision to lower its deposit rates.
"Post-demonetisation gradually some of the deposits have started to go out of the system and roughly for us about 40 per cent of the deposits have gone out from the bank. We still have 60 per cent. That is one thing," she said.
"We were not very keen to increase the MCLR (marginal cost of funds-based lending rates) at this point. As cost of deposit goes up, it has an upward pressure on the MCLR as well. To maintain MCLR for our borrower customers where it is, we have tweaked the rates in certain longer deposit buckets."
Marginal cost of funds-based rate is a new benchmark which banks are using for pricing their home and car loans. They add a margin above their MCLR to price retail loans.
According to SBI's new rates, for two to less than three-year deposits, the bank will offer a rate of 6.25 per cent as compared to 6.75 per cent earlier. For the similar maturity, the deposit rates for senior citizen have been cut to 6.75 per cent from 7.25 per cent.
SBI has not changed its marginal cost of funds-based lending rates. Its one-year MCLR is at eight per cent.
She further said that "there has been a slight uptick in the cost of deposits" since its mega merger last month.
State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, besides Bharatiya Mahila Bank (BMB), became part of SBI with effect from April 1.
After the merger, SBI entered the league of top 50 global banks with a balance sheet size of Rs. 41 lakh crore, 2.77 lakh employees, 50 crore customers, over 22,500 branches and 58,000 ATMs, it said.
SBI or State Bank of India, the country's largest bank, cut its term deposit rates in select maturities from April 29, 2017. The government's move in November last year to withdraw Rs 500 and Rs 1,000 bank notes from the financial system led to a "huge inflow of current account and savings bank deposits", State Bank of India (SBI) chief financial officer Anshula Kant told NDTV Profit, while explaining the rationale behind her bank's decision to lower its deposit rates.
"Post-demonetisation gradually some of the deposits have started to go out of the system and roughly for us about 40 per cent of the deposits have gone out from the bank. We still have 60 per cent. That is one thing," she said.
"We were not very keen to increase the MCLR (marginal cost of funds-based lending rates) at this point. As cost of deposit goes up, it has an upward pressure on the MCLR as well. To maintain MCLR for our borrower customers where it is, we have tweaked the rates in certain longer deposit buckets."
Marginal cost of funds-based rate is a new benchmark which banks are using for pricing their home and car loans. They add a margin above their MCLR to price retail loans.
According to SBI's new rates, for two to less than three-year deposits, the bank will offer a rate of 6.25 per cent as compared to 6.75 per cent earlier. For the similar maturity, the deposit rates for senior citizen have been cut to 6.75 per cent from 7.25 per cent.
SBI has not changed its marginal cost of funds-based lending rates. Its one-year MCLR is at eight per cent.
She further said that "there has been a slight uptick in the cost of deposits" since its mega merger last month.
State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, besides Bharatiya Mahila Bank (BMB), became part of SBI with effect from April 1.
After the merger, SBI entered the league of top 50 global banks with a balance sheet size of Rs. 41 lakh crore, 2.77 lakh employees, 50 crore customers, over 22,500 branches and 58,000 ATMs, it said.
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