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SBI cuts rates for most savings bank accounts

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.

SBI cuts rates for most savings bank accounts
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New Delhi

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 (USD 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. 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. bit.ly/2uPDwXo

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

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