InvestorQ : Why have large banks like ICICI Bank and SBI cut the interest rates on savings deposits?
Riya Dwivedi made post

Why have large banks like ICICI Bank and SBI cut the interest rates on savings deposits?

Answer
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rhea Babu answered.
3 months ago


ICICI Bank has cut interest rate on savings bank deposits by 25 basis points (bps) to 3% even as SBI reduced its rates from 2.75% to 2.7% on savings accounts. There will be different rates applicable based on deposit amounts. At ICICI Bank all deposits less than Rs.50 lakh will earn only 3%, while deposits of Rs.50 lakh and more will earn 3.5%. Deposit rate cuts have become inevitable in the light of the interest rate of floating rate loans being pegged to an external benchmark. That means; each time the RBI cuts rates, it will also result in lower rates on savings deposits as that is the only way to be able to charge less on loans. For banks, CASA is a huge chunk and a reduction in costs makes a big different to its NIM. At SBI, even deposits of 5 to 10 years now only earn 5.40%.