SBI cuts retail deposit rates by 25 bps

Moneycontrol Bureau

India's largest lender State Bank of India (SBI) on Thursday reduced its retail deposit rates by 25 basis points in tenure up to 240 days with effect from June 08, 2012. Rates for tenures above 240 days remain unchanged.

The Reserve Bank of India (RBI) reversed its interest rate cycle by slashing policy rates by 50 bps in its April 17 annual credit policy. This was the first rate cut after 13 consecutive rate hikes.

With the largest lender transmitting RBI policy actions, it is widely expected that other big banks too may go for similar rate cuts in different deposit schemes. Later, banks would start decreasing lending rates as well.

Meanwhile, RBI is going to announce its mid quarter policy monetary policy on June 18. Amid deceleration in country's growth numbers, analysts expect another repo rate cut of 25 bps. Repo is the rate at which banks borrow money from RBI. Currently, it is at 8% while reverse repo is at 7% and marginal standing facility (MSF) at 9%.

The revised interest rates for domestic term deposits below rupees one crore effective from the 8th  June  2012 would be as under:
(All figures in % per annum)