NEW DELHI: Country’s largest lender SBI has increased its deposit and lending rates after the Reserve Bank’s repo rate hike last week.
SBI said interest rates have been increased by 0.20 per cent on domestic fixed deposits of less than Rs 2 crore for select tenors.
State Bank of India (SBI) on its website said that the revised interest rates on retail domestic fixed deposits (below Rs 2 crore) will be applicable from June 14, 2022.
For deposits ranging from 211 days to less than 1 year, the lender will offer an interest rate of 4.60 per cent, as against 4.40 per cent earlier. Senior citizens will be given an interest of 5.10 percent as against 4.90 percent earlier.
Similarly, for domestic fixed deposits of less than 1 year to 2 years, customers can earn interest of 5.30 per cent up to 0.20 per cent. For senior citizens, the interest rate will be higher by a similar margin of 5.80 per cent.
On tenures ranging from 2 years to less than 3 years, SBI has increased the interest rate from 5.20 per cent to 5.35 per cent, while senior citizens can earn 5.85 per cent as against 5.85 per cent.
The lender has revised interest rates on domestic bulk fixed deposits of Rs 2 crore and above to 0.75 per cent.
For tenures ranging from 1 year to less than 2 years, customers with bulk deposits will earn interest at 4.75 per cent, up from 4 per cent with effect from June 14, 2022. For senior citizens, the new rate will be 5.25 per cent. 4.50 percent.
SBI said, “The premature penalty for bulk fixed deposits for all tenors will be 1 per cent. This will be applicable for all new deposits including renewals. The revised rates of interest will be applicable on renewal of fresh deposits and mature deposits.”
The Reserve Bank of India (RBI) last week raised the repo rate by 0.50 per cent to 4.90 per cent. Repo is the short-term lending rate that RBI charges to banks.
SBI has revised the marginal cost of funds based lending rates (MCLR) to 0.20 per cent with effect from June 15, 2022.
The benchmark one-year MCLR has been revised to 7.40 per cent from the existing 7.20 per cent. Most consumer loans like auto, home and personal loans are linked to MCLR.
The MCLR has been increased to 7.05-7.70 per cent from overnight to three years.
SBI has also increased the Repo Linked Lending Rate (RLLR) with effect from June 15, 2022, according to its website.
The revised RLLR would be 7.15 per cent plus credit risk premium (CRP) as against the existing 6.65 per cent plus CRP.
For better transmission of interest rates to the customers, the MCLR system came into effect from 1st April 2016, which was a departure from the old structure.
From 1 October 2019, all banks will have to lend only at an interest rate linked to an external benchmark such as RBI’s repo rate or Treasury bill yield. As a result, transmission of monetary policy by banks has gained traction.
After the revision of the repo rate of RBI on June 8, many banks have increased the rates.
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