State Bank of India, the country`s largest lender, on Monday introduced a two-tier interest rate structure for its savings bank accounts, reducing interest rates for most of its depositors.
Accounts with a balance of 10 million rupees ($155,994.07) and less will earn 3.5 percent per annum effective July 31, while those above 10 million rupees will continue to earn 4 percent per annum, the bank said in a statement. http://bit.ly/2hf2M6v
About 90 percent of SBI`s savings accounts have balances under 10 million rupees.
"The decline in rate of inflation and high real interest rates are the primary considerations warranting a revision," SBI said.
The revision would enable the bank to maintain its Marginal Cost of funds-based Lending Rate (MCLR) at existing rates, the lender added.
The bank`s overnight MCLR rate, effective July 1, currently stands at 7.75 percent. http://bit.ly/2uPDwXo
Shares of the bank spiked after the announcement, climbing as much as 4.75 percent.
($1 = 64.1050 Indian rupees)