SBI offers higher rates for deposit of Rs.15 lakh to Rs.1 crore

State Bank of India will offer higher interest rates on deposits of certain size and maturity for the next three months. The bank has increased rate on domestic term deposits of Rs 15 lakh and above but less than Rs 1 crore having maturity of one year and above to 8.25 per cent, effective January 8. The revised offer will be only up to March 31. At present the rates for this mid-size deposits range from 7.75 per cent to 8.25 per cent across various maturities. The move is expected to help the bank to shore up its deposits in the current fiscal. A senior SBI official said the bank does not want to be aggressive in the bulk deposit segment, that are above Rs 1 crore, but is looking for "more stable and less demanding deposits". Similarly, in case of deposits below Rs 15 lakh the cost of mobilisation is higher, which is why the bank is offering higher interest rate for this particular segment of deposits, he said. Also, as the liquidity in the banking system is expected to ease post-April, the bank is offering the higher rate only up to March 31, the official added. In December, SBI had raised rates on term deposits of various maturities, starting from deposits of seven days, by 25-75 basis points. The bank had also raised its prime-lending rate by 50 basis points to 11.5 per cent last month. According to industry experts, this is a good move by SBI as a business proposition. Increasing the share of deposits below Rs 15 lakh would become unwieldy, due to large number of deposits.