State Bank of India (SBI) has changed tack to focus on mobilising large-size deposits as it braces for further tightness as the demand for loan is picking up.
In the last fiscal year, when liquidity was ample, the country?s biggest lender repaid half of its high-cost so-called bulk deposits.
Now, it has begun offering a premium for deposits of Rs 50 crore or above, officials said on Wednesday, forecasting demand for loans would rise.
SBI will pay 6.5% interest on a minimum deposit of Rs 50 crore for one year or above. This is 50 basis points above the top rate for the standard bulk deposit of at least Rs 1 crore. Higher interest rate is offered on large bulk deposits for a limited period, said an official who manages bulk deposits of the bank.
The bank in its website says it accepts deposits of Rs 1 crore and above for different tenures at 1.50-6.00%. The premium rate scheme for big bulk deposits was launched a few days before Reserve Bank of India hiked policy rates by 25 basis points on Friday.
Another senior official said the focus on big sized bulk deposits anticipated tightness and RBI reducing liquidity support in the coming days.
It was in line with SBI’s decision to borrow from the RBI in the 5.50% repo tender despite having Rs 30,000 crore surplus funds, which were invested in government securities. ?Currently, we have no problem with liquidity and we have huge cash surplus,? the official said.
However, the official noted ?a pick-up in loan demand and excess liquidity is drying up fast?.
The plan to mobilise deposits will help it to diversify fund sources. ?(Mobilising bulk deposits) is another option that we have considered,? he said.