SBI customer? This new rule will be applicable from May 1 - What savings bank account users should know
SBI's new rule: Those who have savings accounts with State Bank of India (SBI) need to know about the new rule which the largest public sector bank will be implementing from May 1. If you too have savings account with the bank, you should know that from the said date, your savings will get less interest on deposits of over one lakh rupees. And the interest rate for deposits above this amount will be 3.25 per cent only, according to SBI website sbi.co.in, which added that it would be 2.75 per cent below the repo rate.
Notably, Reserve Bank of India (RBI) has cut the repo rate by 25 basis points from 6.25 per cent to 6 per cent in its recent monetary policy review. The interest rate at which the RBI lends money to commercial banks such as SBI is termed as Repo rate. Here are key points related to the new rule that the SBI will be implementing from May 1: Image source: Reuters
1. According to the SBI website, SBI will relate its key pricing decision for savings bank deposits and short term loans to the RBI's repo rate from May 1, 2019. Image source: PTI
2. The State Bank of India took this step to address the concern of rigidities in the balance sheet structure and for quick transmission of changes in RBI's policy rates. Image source: IANS
3. Earlier in a statement, the SBI has said, "In order to insulate the small deposit holders and small borrowers from the movement of external benchmarks, SBI has decided to exempt Savings Bank account holders with balances up to Rs 1 lakh and borrowers with cash credit or overdraft limits up to Rs 1 lakh from linkage to the repo rate." Image source: Reuters
4. In accordance with its statement, the SBI said that for balances up to Rs 1 lakh, it will offer an interest rate of 3.50 per cent per annum, while deposits over Rs 1 lakh will receive interest rate at 3.25 per cent only. Image source: Reuters
4. In accordance with its statement, the SBI said that for balances up to Rs 1 lakh, it will offer an interest rate of 3.50 per cent per annum, while deposits over Rs 1 lakh will receive interest rate at 3.25 per cent only. Image source: Reuters