"It has been decided to revise downwards by 25 bps the interest rate on bulk deposits (rupees one crore and above) for tenors (of) seven days to less than one year," the country's largest lender informed the Bombay Stock Exchange.
The revised interest rate will be effective from June 07, 2013.
Business Standard quoted a SBI official as saying "the bulk money is essentially from institutional side, including corporates. We have more than adequate amounts; so, do not see a need to attract 'hot' money."
SBI said this move is aimed at realigning the deposit rates with borrowing rates as RBI had reduced the repo rate in May policy. It said that yield on investments also dropped due to falling interest rates and hence, to save the margins, bulk deposit rates have been reduced.
While the system continues to face liquidity crunch, SBI is sitting on excess cash of over Rs 40,000 crore.