TRIM TIME

Mumbai, Nov. 6: The State Bank of India (SBI) today reduced interest rates on deposits by 25-50 basis points across select maturities in an attempt to push up margins. The nationalised bank also extended its popular home loan scheme, offering an interest rate of 8 per cent, till March 31, 2010.

The deposit rate cut will be effective from November 9. According to the revised structure, deposits in the 15-45 day bracket will carry an interest rate of 2.50 per cent against 2.75 per cent earlier. Interest rates on deposits of 46-90 days will be 3.50 per cent (3.75 per cent) and for 91-180 days will be 4.75 per cent (5 per cent).

Interest rates for deposits in the maturity bucket of 181 days to less than 1 year, 1 year to less than 2 years and 2 years to less than 3 years will stand at 5.25 per cent, 6 per cent and 6.50 per cent, respectively. The highest reduction of 50 basis points is for deposits of 3 years to less than 5 years and of 181 days to less than a year.

Bankers said the rate reduction was part of SBI’s efforts to shore up its margins. Like its peers, the SBI also has to deal with a lacklustre credit growth along with high liquidity.

The success of My Home Campaign in reviving interest in housing has prompted the PSU bank to extend the scheme till March.

Three popular products are offered under the scheme. For borrowings up to Rs 5 lakh with a maximum tenure of 10 years, the SBI Hi-Five Home Loan scheme carries a fixed rate of 8 per cent for 5 years.

For loans above Rs 5 lakh and up to Rs 50 lakh, the SBI Easy Home Loan Scheme offers a fixed interest rate of 8 per cent in the first year and 8.5 per cent during the second and third years.

The SBI Advantage Home Loan scheme has a fixed rate of 8 per cent during the first year and 9 per cent during the second and third years. Subsequently, the rates will be linked to the bank’s benchmark rate.