SBI slashes deposit rates for bank balances lower than Rs 1 crore

State Bank of India (SBI) on Monday slashed deposit rates for bank balances under Rs 1 crore. 

SBI said that while bank balance over Rs 1 crore will continue to earn interest at 4% per annum, interest at 3.50% per annum will be offered on balances of Rs 1 crore and below.

Giving the reason on revising interest rate, the bank said that the decline in rate of inflation and high real interest rates are the primary considerations. 

"The revision in saving bank rate would enable the bank to maintain the MCLR at the existing rates, benefiting a large segment of retail borrowers in SME, agriculture and affordable housing segments", SBI said. 

Shares of State Bank of India surged over 3% after the bank announced the introduction of tier-2 saving bank interest rate with immediate effect. 

At 1125 hours the shares of the bank were trading at Rs 306.95 per piece, up 2.59% or Rs 7.75 on BSE.