State Bank of India has slashed interest rates on retail term deposits by up to 40 basis points (bps) across all tenors, from May 27.
This is the second instance of a deposit rate cut by the bank this month, as it deals with the challenge of managing a huge pool of surplus funds, in the absence of robust credit demand. It had revised deposit rates by 20 bps effective May 12.
The revised rates shall be made applicable to fresh deposits and renewals of maturing deposits.
According to the SBI website, the revised rate for a 7-45 day bucket will be 2.9 per cent at the short end, against the old rate of 3.3 per cent. In the medium term — from one-year to below two-year tenor — it will offer 5.1 per cent, against 5.5 per cent. For the long term — five year and above — it would be 5.4 per cent, against 5.7 per cent.
The lender said it has decided to extend the moratorium by three months in loan accounts of all eligible customers, without waiting for a request.
During the second review of its monetary policy last week, the RBI announced an extension in the moratorium on EMIs for term loans by another three months, till August 31. Earlier on March 27, the central bank had allowed banks to grant a 3-month moratorium, from March 1 till May 31.
The extension of the moratorium, and deferment of EMIs will give some respite to borrowers amid the outbreak, SBI said in a statement.
Besides, the bank has reached out to all eligible loan customers to obtain their consent to stop the standing instructions (SI) mandate for EMIs due in June, July, and August.
For this, it has simplified the process by getting in touch with close to 8.5 million borrowers via SMS, seeking consent to stop EMIs. The borrowers have to reply with a YES to a designated virtual mobile number (VMN) mentioned in the SMS within 5 days of receiving the SMS, if they wish to defer their EMIs.