SBI Chairman expects deposit rates to decrease in the medium term after reaching their highest point

SBI Chairman Dinesh Kumar Khara has stated that deposit rates have reached their highest point and will decrease shortly.
The biggest bank in the country mentioned that the RBI might begin reducing interest rates in the third quarter of the current fiscal year

By previous updates, the Reserve Bank of India (RBI) decided to maintain its key interest rates for the eighth consecutive time, with attention on inflation amidst strong economic expansion.

According to reports from the RBI, we are optimistic that in the third quarter commencing in October, there may be a chance that the inflation rate will start to move towards 4%,  leading to a potential interest rate cut.

Central banks from developed countries such as Switzerland, Sweden, Canada, and the Eurozone have started lowering their interest rates in 2024.

However, the anticipated rate cut by the US Federal Reserve, which was previously high, has since decreased.

SBI increased the fixed deposit rate by up to 75 basis points on certain short-term maturity options last month.

The rate for retail term deposits ranging from 46 to 179 days has been raised from 4.75 % to 5.50 %, reflecting an increase of 75 basis points.

The other two maturity buckets have seen a rise of 25 basis points, with rates now at 6 percent for 180-210 days and 6.25 percent for 211 days to less than 1 year.

SBI decided not to change interest rates on maturity buckets longer than one year.