No plans to hike savings deposit rates now: SBI
Posted on: 01:28 AM IST Nov 10, 2011
Mumbai: Country's largest lender State Bank of India on Wednesday ruled out a hike in savings bank interest rate as of now.
"There is not much adverse movement in the savings bank (SB) balances in the last one month. As of now, we have no plans to tinker with the SB interest rates," State Bank of India (SBI) CMD Pratip Chaudhuri said here.
The Reserve Bank of India in its mid-year monetary policy review in October had deregulated savings bank deposit rates.
After the deregulation, a few private sector players such as YES Bank and Kotak Mahindra Bank, have increased savings bank interest rates to 6 per cent from 4 per cent.
Chaudhuri said those banks which have raised savings deposit rates lack reach.
"Banks, which have raised the savings bank interest rate, are the banks who lack reach. So, they would like to play the battle on the basis of pricing which is what their choice is.
But we are in the market-based on reach, service, facility and so on."
Chaudhuri, however, said the bank is keeping a close watch on any significant shift in saving bank account holders.
The bank is sitting on a huge deposit base and has no concern regarding cost of deposits going up due to the deregulation.
The public sector lender is also in the process of shedding its bulk deposit portfolio in order to maintain the margin.
"We have reduced our bulk deposit from 17 per cent of total deposit to 12 per cent as of now, as retail deposit has witnessed significant growth in the recent past," Chaudhuri said.