SBI ups NRE Rupee deposit rates by 25 bps

In its bid to meet the 25% deposit growth target, the nation's largest lender State Bank of India today revised its pricing on NRE rupee deposits on select maturities and baskets by 0.25% at 9%.

"State Bank has decided to raise the rate of interest on NRE rupee term deposits for tenors three years and less than five years from 8.75% to 9%, on deposits under Rs 15 lakh category with effect from yesterday," the bank said here.
Last month, SBI Managing Director and Group Executive for National Banking A Krishna Kumar had said that the bank was targeting growth of 25% in deposits and 22% in advances in the current fiscal.
"As of March end, we have roughly grown about 18% in deposits and 15-16% in credit," Kumar said. According to the latest RBI data, deposits, mainly fixed deposits, rose 1.9% to Rs 3,25,514 crore in April-June period,  against Rs 2,83,979 crore in the year-ago period.
Thanks to the liberalisation in interest rates, non-resident Indian (NRI) deposits have become attractive.
In the April-June period, the credit off-take was more or less on par with the year-ago period.
With deposit accretion outpacing credit growth, the collective incremental credit-deposit ratio of banks has gone down to 46% from 52% in the year-ago period.
In the domestic context, a CD ratio of 70% is considered ideal.
The RBI has set deposit growth guidance of 14% to 15% this fiscal and a credit growth at 17%. Banks' incremental credit-deposit ratio, which reflects fresh demand for loans in proportion to deposits, stood at just 48% compared to 51% in the same period last year and 84% in FY11.
Banks outstanding deposits as of June end stood at Rs 62,29,200 crore, while credit stood at Rs 47,60,800 crore.