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  1. As SBI slashes savings rate to 3.5%, Kotak Mahindra Bank holds rates at 6%

As SBI slashes savings rate to 3.5%, Kotak Mahindra Bank holds rates at 6%

Kotak Mahindra Bank has announced that its customers will continue to enjoy 6% interest rate per annum on savings account balances above Rs 1 lakh and up to Rs 1 crore.

By: | Updated: August 3, 2017 6:01 PM

 

 Kotak Mahindra Bank, hold, retail savings rate, SBI, slashes, interest rates, savings bank accounts Kotak says 99.9% of their savings account customers continue to enjoy the same savings interest rate as before.

In an environment where interest rates are on a downward trajectory, Kotak Mahindra Bank (KMB) today announced that its customers will continue to enjoy 6% interest rate per annum on savings account balances above Rs 1 lakh and up to Rs 1 crore.

Shanti Ekambaram, President-Consumer Banking, Kotak Mahindra Bank, said, “Our focus continues to be on building a quality retail franchise. Hence, we are holding our savings interest rate in the retail segment. Effectively, 99.9% of our savings account customers continue to enjoy the same savings interest rate as before.”

Savings Bank  Balances Present*

Savings Rate p.a.

New Savings Rates p.a.*

Effective Aug 4, 2017

Up to Rs 1 lakh 5.0% 5.0%
Above Rs 1 lakh up to Rs 1crore 6.0% 6.0%
Above Rs 1 crore up to Rs 5 crore 6.0% 5.5%
Above Rs 5 crore 5.5% 5.5%

* Applicable for resident savings account only

It may be noted that State Bank of India, the largest commercial bank in the country, had recently slashed interest rates on savings bank accounts by introducing a 2-tier saving bank interest rate w.e.f. July 31, 2017. While the balance above Rs 1 crore will continue to earn interest at 4% per annum, interest at 3.5% rate will be offered on balances of Rs 1 crore and below.

The decline in the rate of inflation and high real interest rates are the primary considerations for warranting a revision in the rate of interest of savings bank deposits, the had said.

The bank had cut the MCLR by 90 basis points effective January 1, 2017, on the strength of large inflows in savings and current accounts during the demonetisation period in the month of November and December 2016. There has been a significant outflow of CASA deposits since then. The revision in savings bank rate would enable the bank to maintain the MCLR at the existing rates, benefitting a large segment of retail borrowers in SME, agriculture and affordable housing segments.

It may be recalled that SBI had recently reduced charges for NEFT and RTGS transactions by up to 75%, effective from July 15, 2017. The reduced charges were applicable on the transactions done through the internet banking (INB) and mobile banking (MB) services offered by the bank. Additionally, the bank had also waived charges for fund transfer of up to Rs 1,000 done through Immediate Payment Service (IMPS) effective 1st July 2017.

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