The State Bank of India (SBI) has raised its deposit and lending rates. The move by the country’s biggest lender came after the Reserve Bank of India (RBI) hiked the repo rate last week. Although this is a welcome announcement for SBI account holders who have deposits.
However, interest rates have increased on home, auto and personal loans.
The Reserve Bank of India (RBI) last week raised the repo rate by 0.50% to 4.90%. Repo is the short term lending rate charged by RBI to banks.
SBI DEPOSIT INTEREST RATES
SBI said interest rates were raised by 0.20% on domestic time deposits below Rs 2 crore for some tenors.
Revised domestic retail term deposit interest rates (below Rs 2 crore) came into effect on June 14, 2022, the State Bank of India (SBI) said on its website.
For deposits of 211 days to less than 1 year, the lender will offer an interest rate of 4.60%, compared to 4.40% previously. Seniors will be offered an interest rate of 5.10% against 4.90% previously.
Similarly, for domestic term deposits from 1 year to less than 2 years, customers can earn interest at 5.30%, up from 0.20%. For seniors, the interest rate will be higher by a similar margin at 5.80%.
On a duration of 2 years to less than 3 years, SBI raised the interest rate from 5.20% to 5.35%, while the elderly can earn 5.85% against 5.70% previously.
The lender has also revised interest rates on domestic bulk term deposits from Rs 2 crore and above for some tenors up to 0.75%.
For maturities of 1 year to less than 2 years, customers with bulk deposits will earn interest at 4.75% compared to 4% previously, starting June 14, 2022. For seniors, the new rate will be 5, 25% versus 4.50 percent.
“The premature penalty for bulk term deposits for all maturities will be 1%. It will be applicable to all new deposits, including renewals. The revised interest rates will be made applicable to new deposits and renewals of deposits expiring,” the SBI said.
SBI HOUSING LOAN, CAR LOAN
The SBI also revised the marginal cost of funds-based lending rates (MCLR) up to 0.20% with effect from June 15, 2022.
The one-year benchmark MCLR has been revised upwards to 7.40% from the current rate of 7.20%. Most consumer loans such as auto, home, and personal loans are tied to MCLR.
Three-year overnight MCLRs were raised to 7.05-7.70%.
SBI also raised the repo-linked lending rate (RLLR) with effect from June 15, 2022, according to its website.
The revised RLLR will be 7.15% plus the credit risk premium (CRP), compared to the current 6.65% plus the CRP.
The MCLR system came into effect on April 1, 2016, moving from the old framework, for better transmission of interest rates to customers.
From October 1, 2019, all banks must lend only at an interest rate linked to an external benchmark such as the RBI repo rate or Treasury bill yield. As a result, the transmission of monetary policy through banks has gained ground.
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