Many people try to fit a financial plan to their wants rather than the other way around
SBI raised interest rates on NRE rupee term deposits for tenors three years and less than five years from 8.75% to 9, on deposits under Rs15 lakh category
Mumbai: In its bid to meet the 25% deposit growth target, the country’s largest lender State Bank of India (SBI) has revised its pricing on NRE rupee deposits on select maturities and baskets by 0.25% at 9%, reports PTI.
"State Bank has decided to raise the rate of interest on NRE rupee term deposits for tenors three years and less than five years from 8.75% to 9, on deposits under Rs15 lakh category with effect from yesterday," the bank said.
Last month, SBI Managing Director and Group Executive for National Banking A Krishna Kumar had said that the bank was targeting growth of 25% in deposits and 22% in advances in the current fiscal.
"As of March end, we have roughly grown about 18% in deposits and 15-16% in credit," Kumar said.
According to the latest RBI data, deposits, mainly fixed deposits, rose 1.9% to Rs3.3 lakh crore in April-June period, against Rs2.8 lakh crore in the year-ago period.
Thanks to the liberalisation in interest rates, non-resident Indian (NRI) deposits have become attractive.
In the April-June period, the credit off-take was more or less on par with the year-ago period.
With deposit accretion outpacing credit growth, the collective incremental credit-deposit ratio of banks has gone down to 46% from 52% in the year-ago period.
In the domestic context, a CD ratio of 70% is considered ideal.
The RBI has set deposit growth guidance of 14 to 15% this fiscal and a credit growth at 17 percent. Banks' incremental credit-deposit ratio, which reflects fresh demand for loans in proportion to deposits, stood at just 48% compared to 51% in the same period last year and 84% in FY11.
Banks' outstanding deposits as of June end stood at Rs62.3 lakh crore, while credit stood at Rs47.6 lakh crore.