SBI Fixed Deposit interest rates hiked by by up to 10 bps

The largest public sector lender, State Bank of India (SBI), has hiked the interest rates it offers on fixed deposits by up to 10 basis points. The new interest rates, which are effective from July 30, are applicable on retail deposits below Rs 1 crore. 
 
Under the revised rate structure, the deposits for 1 year to 2 years will now accrue 6.7 percent as against 6.65 percent earlier.
 
For senior citizens, the new interest rate is 7.2 percent from earlier 7.15 percent earlier. 
 
For investments from 2 years to 3 years, the interest rate has also been revised to 7.3 percent from earlier 7.15 percent.

Meanwhile, shares of SBI jumped as much as 4.4 per cent to Rs 299.25, highest since February 9, on interest rate hike.

More than 18.8 million shares changed hands, compared with the 30-day moving average of 16.2 million. Up to last close, the SBI stock had fallen 7.5 pct, compared with Nifty Bank Index's gain of 8.2 per cent.

Last week, State Bank of India share price rallied over 5 per cent after it expressed expectation to recover half of the assets that turned sour in the initial 12 large bad loan accounts that were identified for bankruptcy resolution.

The stock had gained as much as 5.26 per cent to Rs 285.75 on the BSE, as SBI share price was rallying for last 8 sessions in a row. SBI scrip, however, was down 12.3 per cent this year as of last close, while the broader Nifty remained 5.7 per cent in the same period.

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“The recoveries will be around 50% and most banks are holding provisions in excess of 50%. It may differ from bank to bank, but at SBI, our estimate is that we will be able to write back part of the provisions if everything goes well,” chairman Rajnish Kumar had told Mint in an interview..