Kotak Mahindra Bank slashes interest 0.50% rate on savings deposits

Private sector lender Kotak Mahindra Bank (KMB) on Monday slashed the interest rate on savings deposits by a further 0.50 percent. The bank has cut rates twice last month on its deposit rate offering on the savings accounts.

From Monday, the daily balance of over Rs 1 lakh will earn 4 percent interest as against the 4.50 percent earlier, while those under that threshold will earn 3.50 percent, the bank said.

The revisions are applicable for deposits in residents’ accounts only, it said.

It can be noted that deposit rates across the system are dipping due to a combination of an interest rate lowering by the Reserve Bank of India and also a lack of loan growth where the money can be deployed.

Largest lender SBI offers an interest rate offering of as low as 2.75 percent on the savings bank deposits, while others like Yes Bank, which also has an aggressive strategy, have hinted at the possibility of lowering the rates in the near future.

During a recent media call, Uday Kotak, the lender’s managing director, had counted deposit accretion as among the key focus areas for the bank amid the COVID-19 pandemic crisis.

KMB was among banks – like Yes Bank, IndusInd Bank and DBS – to offer higher pricing on savings deposits that had peaked at 7 percent for the past many years.