SBI said in a regulatory filing that the decline in inflation rate and already high real interest rates were primary reasons for the revision in savings account interest rate. It also said that the move will allow the bank to maintain the marginal cost of fund based lending rate (MCLR) at current rates.
Analysts have taken this move as a positive one as it will help SBI in increasing its margins. SBI has always initiated the rate cuts after which many public as well as private sector banks follow its path. It is quite possible that many banks would follow this suit as well. SBI’s stocks went up by around 5% to Rs 312.65 after this announcement.