Mumbai (PTI): In order to lure depositors to meet its credit and other needs, country’s largest lender State Bank of India today announced an increase in medium to long term fixed deposits rates by up to 0.50 per cent from June 1.
Last month too, SBI had raised fixed deposit rates and the latest move is likely to have a fall out on interest rates regime in the banking sector, even though the second largest PSU bank PNB said it would take a call on rates after its Asset Liability Committee (ALCO) meeting.
State Bank of India will increase interest rates on deposits of two year to less than three years by 0.25 per cent to 8.75 per cent.
Rates on deposits of three years to less than five years would be raised by 0.15 per cent to 8.85, while those on deposits of five years and up to ten years by 0.50 per cent to nine per cent, the bank said in a statement here.
Deposit rates for less than two years will continue to fetch the same interest rate.
The interest rate hike is expected to have an effect on the bank’s net interest margin, which dropped from 3.41 per cent in 2006-07 to 3.07 per cent in 2007-08.
Source: hindu.com
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