SBI cuts interest rates by 0.25% on deposits of 5 yrs and more

Mumbai, Aug 2: State Bank of India (

) today lowered interest rates on domestic term deposits of maturity of five years and more by 0.25 per cent to 8.50 per cent.

"The bank has decided to revise downwards the interest rate on domestic term deposits for tenors 5 years and above to 8.5 per cent with effect from Aug 7, 2012," State Bank of India (SBI) said in a filing to the BSE.

The country's largest bank offers an interest rate of 8.75 per cent on deposits below Rs 15 lakh and 9 per cent on deposits from Rs 15 lakh to less than Rs 1 crore. Punjab National Bank (PNB), however, has increased the interest rates on deposits by 0.25 per cent to 9 per cent for maturity of one year with effect from today.

"The bank has decided to increase the rate of interest on single domestic deposit of less than Rs 1 crore from 8.75 per cent to 9 per cent for maturity of one year," PNB said in a separate filing to the BSE.

PNB further said that NRE term deposits will also attract an interest rate of 9 per cent, as applicable to domestic term deposits.

SBI yesterday announced reduction in lending rates by 0.5 per cent on home and auto loans. The decision to alter deposits rates within days of Reserve Bank announcing its first quarterly monetary policy review.

The central bank, despite pressure from India Inc, decided to keep the key interest rate unchanged in view of high inflation. RBI, however, had lowered the Statutory Liquidity Ratio (SLR), the portion of deposits that banks are required to invest in government bonds, by one per cent to 23 per cent.

PTI