In a landmark step, State Bank of India (SBI) cut interest rates on savings accounts that hold less than Rs 1 crore. This is the first such move by any bank in India's history.
In an interview to CNBC-TV18, Siddharth Purohit, Senior Research Analyst at Angel Broking shared his views and readings about the same.
Deposit rate cut by SBI was a long overdue process. It was expected, he said.
Margins of a lot of public sector undertaking (PSU) banks were under pressure. According to him, with this move net interest margins (NIMs) will get some relief if other banks also follow this step.
Private sector banks had been a preferred pick for us and within that we are more positive on non-banking financial companies (NBFCs) as well, he added.
With this move, SBI has now come to a stronger position in terms of earnings because now NIMs won’t be under pressure, said Purohit.
Within the entire banking space, Purohit likes private banks but within PSU banks, he has a preference for SBI.
For full interview, watch accompanying video...
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