State Bank of India has cut the interest rate on ultra-short duration bulk deposits of Re 1 crore and above to 8.5 per cent.

In a filing with the stock exchanges late last night, SBI said that the interest rate on bulk deposits for a tenure of 7-60 days would be 8.5 per cent per annum with effect from October 10.

The bank had revised the revised rates with effect from August 31, interest rates on domestic term deposits of Re 1 crore and above for a tenure of 7 days to 60 days to 9 per cent from 7.25 per cent for the general public (excluding senior citizens for whom it was raised to 9.25 per cent from 7.5 per cent).

It has now cut the interest rates for ultra short-term bulk deposits to 8.5 per cent. It was not specifically mentioned in the SBI statement to the stock exchanges as to whether the interest rate cut to 8.5 per cent would be applied uniformly to both categories of depositors — general public and senior citizens.

SBI has become the second PSU bank after Oriental Bank of Commerce (OBC) to reduce the interest rate on short-term bulk deposits after the RBI’s decision to cut the interest rate on Marginal Standing Facility (MSF) by 50 bps.

OBC had announced on Monday that it had reduced the interest rate on term deposits of Re 1 crore & above with a maturity of 180 days to less than two years by 25 bps i.e.from 9.25 per cent to 9 per cent with effect from Tuesday.

(This article was published on October 9, 2013)
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