New Delhi: India’s largest lender SBI on Monday announced a 0.5 percent (50 basis points) cut in interest rates for savings bank deposits, effective immediately.


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According to the new structure, for saving deposits balance up to Rs 1 crore, SBI will offer a rate of 3.5 percent as compared to 4 percent earlier, the bank said.


However, for saving deposits balance above Rs 1 crore, rate of interest has been retained at 4 percent per annum.


Around 90 percent of the total savings accounts held by the bank have balance below Rs 1 crore. |


"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.


Shares of the bank spiked after the announcement, climbing as much as 4.75 percent.


State Bank of India had earlier cut its term deposit rates by up to 50 basis points for various maturities.