Punjab National Bank revises interest rates for savings bank account

Customers with savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4% per annum, the lender said in a statement.

At the end of the June quarter, HDFC Bank's savings account deposits stood at Rs 1.93 lakh crore, up 26.5% from the previous year, while the current account deposits stood at Rs 1.02 lakh crore, up 34% from the year-ago period. The bank has maintained the 6% return that it offered customers with deposits between Rs 1 lakh and Rs 1 crore, while reducing the rate on deposits above Rs 1 crore to 5.5% from 6% earlier. The revised rates will be effective from August 19, 2017, said the bank in a BSE filing on Thursday post market hours.

Deregulation of interest rates on savings bank accounts was meant to strengthen competitive forces, improve resource efficiency and strengthen the transmission of monetary policy. Axis Bank, ICICI Bank and HDFC Bank also slashed their interest rates on savings deposits of select deposit amounts. This takes the total number of banks to have reduced their savings account rate to seven. Then, after a few months in October 2011, the central bank deregulated the savings rate, allowing banks the freedom to take their own decisions on interest rates.

For balances of Rs one crore and above, the new rate will be 6.25 per cent, down from the old rate of 6.5 per cent. For deposits above Rs 50 lakh, the interest rate would remain unchanged at 4 percent. The rate above Rs 50 lakh was not changed. The new SB rates for resident and non-resident customers will be effective September 1. The other four banks are Bank of Baroda, Axis Bank, Indian Bank and Karnataka Bank. On deposits in the ₹1 crore and above slab, the rate has been pared to 6.25 per cent from 6.50 per cent.

Vanessa Coleman