Will SBI Lower Deposit Rates? Here Is What SBI Chairman CS Setty Said

The country's largest lender State Bank of India (SBI) does not expect an aggressive rate cut in the coming few months. This comes after it reduced its fixed deposit rate, following the Reserve Bank's policy rate cut, making loans cheaper for existing and new borrowers.

When asked if the bank would lower deposit rates, SBI Chairman CS Seety told Economic Times that there is a scope. "But aggressive rate cuts are unlikely," he added.

The bank earlier this month cut the fixed deposit rate by 5 basis points for maturity two years to less than three years to 6.40% effective Dec. 15. However, the bank has retained interest rates on other maturity buckets, indicating pressure on deposit mobilisation.

The interest rate of the specific tenor scheme of '444 days' that is Amrit Vrishti has been revised from 6.60% to 6.45% with effect from Dec. 15.

The bank has also slashed the Marginal Cost of Funds-Based Lending Rate (MCLR) across all tenures by 5 basis points. With the revision, the one-year maturity MCLR will fall to 8.70% from the existing 8.75%.

Similarly, a one-year maturity rate will be cheaper by 5% to 8.75% and 8.80%, respectively, it said.

The bank has lowered the Base Rate/BPLR to 9.90% from the existing 10%, effective from Dec. 15, it said.

The Chairman while discussing its initial public offering, said that IPO of SBI Mutual Fund is likely to be completed in 12 months. He also added that there are no plans for other IPOs or stake sale.

He also clarified that the bank will not need any fresh capital for the next five years. This was majorly as it had raised Rs 25,000 crore through qualified institutional placement this year.

While discussing the hot topic of tariffs he also added that its too early to assess what impact it will have on exporters. However, he said so far there has been no major impact on any portfolio. This according to him was as many exporters were able to diversify their geographical markets. "The real major impact will be felt the next quarter," he told Economic Times.