SBI slashes domestic term deposit rates

Mumbai, September 5: Amid a dry pipeline of loans and challenges in managing excess cash, State Bank of India on Wednesday reduced interest rates on domestic retail term deposits by 50-100 basis points. The bank said the revision in rates was for deposits of up to five years. The new rates would be effective from Friday.
For deposits of up to Rs 15 lakh, the new rate for a period of 241 days to less than a year was 6.5 per cent (the previous rate was 7.5 per cent), while that for a period of a year to less than two years was 8.5 per cent (earlier nine per cent), according to a statement by the bank.
Chairman Pratip Chaudhuri said the bank had huge surplus funds and very few proposals for loans. “From April 1 to August 31, our deposits increased by Rs 78,000 crore, while credit growth was only about Rs 20,000 crore. Second, the pipeline for loan growth, particularly for large credit, is rather dry. That is why we decided to go slightly slow in deposit mobilisation, because there doesn’t seem to be enough utilisation of the deposits. And, if we hadn’t done that, it could have affected margins.”
However, he said this might not lead to reduction in the base rate. “This is only to slow deposit mobilisation,” he said, adding the impact of Wednesday’s rate cut on the cost of funds would come with a lag, as it would only apply to new deposits.
At the end of June, SBI’s cost of deposits stood at 6.24 per cent, compared with 5.66 per cent a year earlier. While the yield on advances was 10.86 per cent, compared with 10.43 per cent in the year-ago period, net interest margin was 3.57 per cent, against 3.62 per cent a year earlier. Chaudhuri said with the revision in deposit rates, the incremental growth in deposits may turn slow. SBI’s retail term deposits rose 25 per cent to Rs 4,36,976 crore in the year ended June, while total deposits rose 16 per cent to Rs 11,02,926 crore.
For short-term deposits of 91-179 days, the new rate is 6.5 per cent (earlier seven per cent). For 180-day deposits, the rate has been revised from seven per cent to 6.5 per cent, and for 181-240 day deposits, the new rate is 6.5 per cent (7.25 per cent earlier). On reviewing credit growth estimates, Chaudhuri said, “We have not yet revised (lowered) the credit growth target for the current financial year. We are still looking at 18-20 per cent growth. The first quarter is generally slow. The consumer segment is accounting for credit demand. The industrial and commercial segments are very slack.”

RBI clarifies on Premature withdrawal of Term Deposits

Mumbai, August 16: The Reserve Bank of India has clarified that in the case of term deposits with “either or survivor” or “former or survivor” mandate, banks are permitted to allow premature withdrawal of the deposits by the surviving joint depositor on the death of the other, only if, there is a joint mandate from the joint depositors to this effect. It had further stated that the joint deposit holders might be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit.

 

Earlier Instruction:

 

The earlier instruction issued by RBI in regard to the Pre-Mature payment of Time Deposits said:

“The signatures of both the depositors may have to be obtained, in case the deposit is to be paid before maturity. If the operating instruction is ‘Either or Survivor’ and one of the depositors expires before the maturity, no pre-payment of the fixed/term deposit may be allowed without the concurrence of the legal heirs of the deceased joint holder. This, however, would not stand in the way of making payment to the survivor on maturity.” (RBI instruction dated November 4, 2011)

 

Revised Instruction:

 

RBI vide their circular issued on August 16, 2012 instructed the banks that:

“The joint deposit holders may be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit. If such a mandate is obtained, banks can allow premature withdrawal of term/fixed deposits by the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder. It is also reiterated that such premature withdrawal would not attract any penal charge.”

Banks begin reviving special schemes

Special schemes are back in focus as bank deposits continue to grow only at a sluggish pace. With no relief in sight for further monetary policy easing, banks have also increased interest rates on long-term deposits, to garner much needed liquidity.
State-run Bank of Baroda on Monday revised deposit rates upwards by 25-65 basis points (bps). M D Mallya, chairman and MD, said it had realigned the rates, keeping in view the sticky inflation and entrenchment of inflationary expectations. The bank has introduced a term deposit scheme of 1,111 days, offering an interest rate of 9.15 per cent. This is 15 bps higher than the normal term deposit of similar tenors.
Other public sector lenders and small private banks are also offering such schemes, where depositors would have to lock-in funds for an exact number of days. "The only attraction in such schemes is a higher rate of interest as compared to normal deposits of the same tenor bracket," said a general manager of a large public sector bank (PSB).

Central Bank of India raised rates on special deposit schemes by 20-25 bps, effective August 6. UCO Bank extended its schemes till September and also increased the maximum deposit cap to Rs 5 crore. In the past fortnight, PSBs have also realigned the rates offered on deposits up to Rs 15 lakh, on Rs lakh to Rs 1 crore and for Rs 1 crore and above.
In October 2007, the Reserve Bank of India (RBI) had asked banks to withdraw special schemes, as the rates of interest offered on these deposits were not in tune with those on normal deposits.
"No bank should discriminate in the matter of interest paid on deposits, between one deposit and another, accepted on the same date and for the same maturity, whether such deposits are accepted at the same office or at different offices of the bank," it had told banks.
To stay within regulatory limits, some banks exclude the special scheme tenor from the normal deposit bucket. For instance, a bank might offer 50 bps more on a tenor of 1,000 days, as compared to tenors of up to 999 days.
Akeel Master, partner, KPMG, said the trend might not sustain for long, as higher interest rates will have an impact on banks' margins in the absence of a corresponding growth in advances. "Banks that are under pressure from mismatch in asset-liabilities for certain tenors must have been compelled to tweak interest rates accordingly," he said.
RBI’s latest data shows bank advances, as of July 27, had grown 17.2 per cent over a year, while deposit growth lagged at 13.8 per cent .
The central bank has projected deposit growth of 16 per cent in the annual monetary and credit policy for 2012-13.
"Concerns that deposit growth has significantly been slower than credit growth for a prolonged period of time is something we have been watching closely and that was one of the issues we discussed with bankers on Monday," RBI Deputy Governor Subir Gokarn had told Business Standard in an interview after the first quarter policy announcement last month.
He said RBI might put out a projection in the second-quarter policy review to be announced on October 30. It is slated to announce the mid-quarter policy review on September 17.

SBI reduces interest rate for deposits over 5 years from Aug 7

Mumbai, August 2: State Bank of India (SBI) on Thursday reduced interest rates for deposits with a term of more than five years to 8.5%, effective August 7. The bank currently offers 8.75% for deposits of up to Rs. 1 crore and 9% for deposits above Rs. 1 crore in this basket. “This is purely an asset-liability mismatch decision,” said SBI Deputy Managing Director and Chief Credit Risk Officer Atanu Sen. “Honestly speaking, we found that the portion of depositors in this basket is quite small. We have not touched other maturity baskets.”

 

SBI’s selective deposit rate cut comes a day after the country’s largest lender reduced its home and auto loan rates, citing extra liquidity support through the Reserve Bank of India’s decision to pare banks’ mandatory bond holding limit to 23% of total deposits from 24% earlier. The bond holding limit is called the Statutory Liquidity Ratio (SLR). SBI said the SLR cut gives it additional liquidity of about Rs. 10,000 crore and the management had decided to pass this on to customers and expand the balance sheet.

 

SBI reduced home loan rates from 10.75% to 10.25% for loans up to Rs. 30 lakh while loans above that will be offered at 10.40%. Auto loan rates were reduced from 11.25% to 10.75%.

 

While the reduced rates are for new customers, existing borrowers can switch to them by paying 1% of the outstanding loan amount to the bank as fees. It said this was not an early payment penalty. “Cost is a factor of time,” said P. Pradeep Kumar, deputy managing director and group executive for global markets at the bank. “We are offering the new rates now based on the existing cost. Even then, our rates are the most competitive in the industry.”

 

PTI reports: The bank said that sluggish growth in the property market prompted it to cut its annual home loan growth target. The bank, which cut its home loan rates on Wednesday, was earlier targeting a 25 per cent growth in its home loan book. Such loans are expected to grow by only 15-20 per cent, the bank said. “There has been a drop in home registrations and we want to be realistic and now expect that the home loan segment will grow by only 15-20 per cent,” Mr. Atanu Sen, Deputy Managing Director said, while addressing a press conference.

Download term deposits interest calculator

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State Bank of India (SBI) Fixed Deposits, Time Deposits or Term Deposits Maturity Interest Calculator. The Calculator calculates the Interest or Maturity Amount you will get after maturity of Fixed Deposits or Term Deposits. State Bank of India (SBI) Fixed Deposits, Time Deposits or Term Deposits Maturity Interest Calculator: is an investment planning tool which allows any Fixed Deposit investor to know the effective annual interest, total returns and total interest or Maturity (Future) Value on the Investment to the individual or business enterprise.

Term deposit is a deposit held at a financial institution that has a fixed term.This is an account which allows to deposit money for a fixed time period. The advantages of term deposits compared to usual savings are the higher interest rates as they have a fixed term. Fixed Depositor Term Deposit is a fixed amount of money deposited at a financial institution, for a fixed time period and for a fixed rate of interest throughout the period. The rate of investment on it is decided by the financial institution, and it is usually calculated based on the invested amount and the tenure of the fixed deposit. Once the term is over, a fixed deposit matures and the maturity amount is available for withdrawal.

The general thumb rule about fixed deposits is that the longer the money is invested, the better the returns. Before investing for any fixed or term deposit, the basic calculations to select the the perfect plan is wise. Therefore when it comes to fixed deposits interest calculation, this fixed deposit or term deposits interest calculator assists you to get the calculations done and you get the maturity value as well as interest receivable by yourself. Great Tool or Calculator for calculate term deposits interest & maturity value. This calculator is designed by admin of www.mysbi.tk for the use of people or customer of any Banks or who wants to invest in FD or TD.

Latest Interest Rates for Domestic Term Deposits for Rs. 1 Crore & above

Domestic Term Deposits of 'Rs One Crore & above'

Term Deposits will continue to be accepted for amounts of ‘Rs. one Crore & above’ at all branches and the ’card’ rates w.e.f. 29.07.2011 are as below:

7 days to 14 days 7.50

15 days to 30 days 7.50

31 days to 45 days 7.50

46 days to 90 days 7.50

91 days to 179 days 8.00

180 days to 240 days 8.00

241 days to 270 days 8.00

271 days to less than 1 year 8.25

1 year to less than 2 years 9.00

2 years and above 8.75


The Differential Rates of Interest (DRI rates for higher amount of deposits) for the day may be obtained from the DGM (SME) at the nearest Local Head Office through the nearest branch.

Premature payment of term deposits:

Interest to be charged on premature withdrawal of term deposits at 0.50% below the rate applicable for the period deposit has remained with the Bank or 0.50% below the contracted rate, whichever is lower, for tenors above 90 days. Penalty for premature withdrawal of term deposits has been waived for deposits of tenors upto 90 days. However, no interest shall be paid on term deposits that have remained with the Bank for less than 7 days.

Latest Interest Rates for Domestic Term Deposits

The revised interest rates for Domestic Term Deposits 'Below Rupees One Crore' effective from the 11.07.2011 would be as under:

7 days to 90 days 7.00

15 days to 45 days 7.00

46 days to 90 days 7.00

91 days to 179 days 7.25

180 days to 240 days 6.50

241 days to less than 1 year 7.75

1 year to less than 2 years 9.25

2 years to less than 3 years 9.25

3 years to less than 5 years 9.25

5 years and up to 10 years 9.25

There shall be no premium in rate of interest for single domestic term deposit of ‘Rs.15 lakhs but less than Rs.1 Crore’ of any maturity.

The revised rates of interest shall be made applicable to fresh deposits and renewals of maturing deposits. The interest rates on “Capgains Plus”, “SBI Tax Savings Scheme 2006(SBITSS)” schemes and NRO deposits shall be aligned as per the revised rates for domestic term deposits. These rates of interest shall also be made applicable to domestic term deposits from Cooperative Banks

Premature Payment of Term Deposits:

Interest to be charged on premature withdrawal of term deposits at 0.50% below the rate applicable for the period deposit has remained with the Bank or 0.50% below the contracted rate, whichever is lower, for tenors above 90 days. Penalty for premature withdrawal of term deposits has been waived for deposits of tenors up to 90 days.

"However, no interest shall be paid on term deposits that have remained with the Bank for less than 7 days."