SBI cuts short-term deposit rates to 6 pct effective October 7

State Bank of India today reduced the short-term deposit rates by 1 percentage point for amount below Rs 1 crore, second such move this month.

In an exchange filing today, the banking giant said it has reduced the pricing of short-term deposits of below Rs 1 crore to 6 per cent from 7 per cent now for a maturity of 7 to 45 days.

The new pricing will be effective October 7, said the lender, which controls close to a quarter of the total liabilities in the banking system.

The bank has retained the existing rates for all other maturities in this bucket.

On September 16, the nation's largest lender had cut the interest rate on medium-term deposits (one year to less than three years maturity) by 25 basis points to 8.75 per cent and by 25 bps the medium-term deposit in the 180-210 days category to 7.25 per cent.

From a quarterly perspective this is the third time that the bank has revised deposit rates. In July too, it had reduced the interest rate on fixed deposits of up to 179 days by 0.50 percentage point (50 bps) and on bulk deposits by 25 bps.

The bank has been witnessing deposits growth at a healthy rate of 13-14 per cent but credit expansion remained tepid at 7 per cent.

State Bank of India