If your account is also in SBI, then this news is very important to you. The effect of the new system of SBI will be on interest rate on Savings Account. Indeed, SBI has linked the interest rate of its deposits and loans to the RBI’s benchmark rate. In such a situation, the interest received on SBI Savings account from May will change. SBI, the country’s largest bank, has cut home loan rates by 5 basis points in the past. Under the new arrangement, deposits of more than 1 lakh and loan interest rates have been linked to the repo rate. Now the repo rate change will affect the bank’s deposit and loan rates. Under the new arrangement, low interest rates will be available on savings accounts from 1st May.
Interest Rate to be Reduced to More than 1 Lakh
SBI customers will get 3.5 percent interest on holding 1 lakh on savings account from 1 May. The interest rate will be 3.25 percent when the account is more than one lakh. Let us tell you that SBI has added all cash credits and overdraft accounts with repayment of more than Rs 1 lakh to the repo rate. The 25 basis point cut was done by the Reserve Bank in the repo rate. After this the bank has implemented a new system.
Replacement Rules After Customer Complaint
In the past, customers had complained that the customers did not get the benefit of reducing the repo rate on behalf of the RBI. With the introduction of the new system, now the direct benefit of reduction in interest rate will be available to customers on home loans, car loans and other types of loans. Also, the interest rate on the savings account will also be affected. In SBI, loans and deposits with less than Rs 1 lakh will be linked to marginal cost of funds based lending rate (MCLR). In such a situation, small customers will be left out of the market. In SBI’s new system, all savings accounts of more than one lakh rupees more than 1 lakh rupees and short-term loans will be linked to RBI’s benchmark repo rate.
First Such Arrangement
Recently, the RBI reduced the repo rate to 6 percent. On the basis of repo rate, RBI lends to banks. Based on this, the cost of banks is increasing on capital cost. On the other hand, the savings account rate will be around 2.75 per cent lower than the repo rate. For short-term loans of more than 1 lakh, the interest rate will be 2.25% higher than the repo rate. This is the first time that a bank has thus linked savings, small loans and deposits with a repo rate directly.
Source : ZeeNews