SBI creates a 1,000-day deposit category

Written by Banking Bureau | Mumbai, Sep 27 | Updated: Sep 28 2008, 06:42am hrs
Preparing itself for garner large chunk of funds with medium-term duration the countrys largest commercial bank, State Bank of India (SBI) has created a new deposit category. This category will have deposits for exactly 1,000 days and will have an interest rate of 10.5 %. The higher deposit rate will be effective from October 1, said release issued by the SBI on Saturday.

Earlier, the bank had just one slab for the period between two years to three years and was paying 9.5% for the same. Now the bank has created three slabs within two years to three years category. For the period between two years to 1,000 days, the bank is paying 9.5% while for the deposit slab for over 1,000 days and less than three years the bank will pay a rate of 9.75%. However, for the 1,000 day deposit category the rate will be 10.5% and for rest of the six categories, the bank has not made any changes in its rates.

Also the present premium of 10 basis points paid on a single term deposit of Rs 15 lakh and above (but less than one crore) also stands modified as under:

An additional 25 basis points over the card rates will be paid on a single term deposit of Rs 15 lakh and above (but less than rupees one crore) for a period of 181 days to less than 2 years.

An additional 10 basis points over the card rates will be paid on a single term deposit of Rs 15 lakh and above (but less than one crore) for other periods of less than 181 days and the periods of 2 years and above.

Analysts point out that the bank is now getting ready to mobilise larger funds for the medium term lending. With medium target inflation of Reserve Bank of India(RBI) at above 5%, the bank is now offering pay higher rates for similar category of deposits.