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EXCLUSIVE: Fixed deposit rates to go up, says SBI boss Dinesh Khara

EXCLUSIVE: Fixed deposit rates to go up, says SBI boss Dinesh Khara

RBI rate hike is good news for depositors, but get ready to shell out more for loans.

SBI Chairman Dinesh Khara SBI Chairman Dinesh Khara

India's largest financial institution, the State Bank of India (SBI), will hike the interest for fresh fixed deposits.

The move follows on the back of the Reserve Bank of India (RBI) hiking the repo rate by 50 basis points on Wednesday.

In an exclusive conversation with Business Today TV, Dinesh Kumar Khara, Chairman, SBI, said, "As far as fresh fixed deposits are concerned, they would be according to the new interest rates. We have already increased our deposit rates for certain maturities."

Currently, if you hold an FD at SBI, you get 5.10 per cent interest rate for a period of 12 to 24 months. Deposits maturing between three to five years offer a 5.45 per cent interest rate as of now.

While this is good news for fresh fixed deposits, the latest repo rate hike spells more bad news for borrowers. Home and auto loan borrowers will have to dole out higher EMIs on their outstanding.

"There are loan contacts which are linked to variable interest rate benchmarks. For such loan contacts it will lead to an increase in interest rates", Khara said. 

Welcoming the RBI's move to allow credit cards to be linked to India's unified payment interface,  beginning with the indigenous RuPay credit cards, Khara said the same is likely to happen with other cards like Visa and Mastercard too.

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Published on: Jun 09, 2022, 11:03 AM IST
Posted by: Aparna Banerjea, Jun 09, 2022, 10:58 AM IST