SBI may cut rates on deposits

State Bank of India may soon be cutting interest rates on its deposits. An official said the bank had discontinued its Platinum Scheme, which was offering 9.25 per cent on deposits of one to three years. Another scheme offering 9.5 per cent interest for four to five year deposits will be discontinued in August.

The SBI official said the cut in deposit rates could in due course be extended across deposits of all maturities.

Cost of deposits in the first quarter of 2006-07 increased to 5.35 per cent in (4.63 per cent), while the yield on advances rose to 9.80 per cent (8.48 per cent).
The Current Account Savings Account ratio to total deposits has fallen to 41.06 per cent (42.67 per cent) due to higher mobilisation of term deposits, said a statement.

Net Non-Performing Assets (NPA) ratio declined to 1.84 per cent (1.62 per cent). The bank has, however, made higher provisioning of Rs 506.32 crore against Rs 173.82 crore in the previous year. “NPAs are going up in absolute terms and while we required to provide Rs 306 crore for provisioning, the additional Rs 200 crore was just a prudent measure,” said the SBI official The capital adequacy ratio stands at 13.13 per cent (11.97 per cent).