SBI launches new deposit scheme with higher interest rate

This initiative comes in response to concerns over sluggish deposit accumulation by banks

MUMBAI: State Bank of India, the largest lender in the country, has introduced a new deposit scheme offering a guaranteed interest rate of 7.25% for a duration of 444 days.

Named “Amrit Vrishti,” this scheme also provides an additional 0.50 per cent interest to senior citizens, according to an official release from SBI.

This initiative comes in response to concerns over sluggish deposit accumulation by banks, resulting in an increasing gap between credit and deposit growth. Earlier, Bank of Baroda (BoB) and Bank of Maharashtra had also launched special deposit schemes with higher interest rates to attract deposits.

BoB’s scheme, known as the “BoB Monsoon Dhamaka Deposit Scheme,” offers interest rates of 7.25 per cent for 399 days and 7.15 per cent per annum for 333 days for deposits below Rs 3 crore. Meanwhile, Bank of Maharashtra’s scheme features four options for deposits up to Rs 10 crore: 6.90 per cent for 200 days, 7.10 per cent for 400 days, 7.15 per cent for 666 days, and 7.25 per cent for 777 days, as listed on their website.

SBI’s special deposit scheme is open for investment until March 31, 2025. Dinesh Khara, chairman of SBI, emphasized that “Amrit Vrishti” is a new variant of a term deposit scheme aimed at meeting the diverse needs of customers. He added that the scheme underscores SBI’s commitment to providing avenues for customers to enhance their wealth.

The Reserve Bank of India (RBI) has consistently cautioned banks about the rising credit-deposit ratio, warning that continued credit growth outpacing deposit growth could pose systemic risks.