Kotak Mahindra Bank cuts interest rates for savings accounts to 3.50%, effective from today; applicable on balance up to Rs 1 lakh

Private lender Kotak Mahindra Bank has cut interest rates for savings bank accounts to 3.50 percent per annum on balance up to Rs 1 lakh from today (25 May).

According to the bank, interest rates on savings account for balance up to Rs 1 lakh has been cut by 25 bps to 3.5 percent from 3.75 percent earlier. For balance above Rs 1 lakh, the interest rate has been cut by 50 bps to 4 percent from 4.5 percent earlier.

The interest rates for Basic Savings Bank Deposit Account/Small Account holders will also be the same. For Non-Resident (NRE/NRO) customers, the interest rate will be 3.50 percent for both senior and non-senior clients.

The change in interest rates comes after the Reserve Bank of India on Friday reduced the repo rate by 40 basis points to 4 percent from 4.4 percent earlier. The central bank also cut the reverse repo rate by 40 bps to 3.35 percent.

The central bank also extended the moratorium on term loans and working capital loans by another 3 months till 31 August.

On 13 May, Kotak Mahindra Bank reported a 10 percent on-year fall in standalone net profit to Rs 1,266.6 crore in the fourth quarter of fiscal 2020 as against Rs 1,407.80 crore in the same period last year.

The bank's average savings deposits grew by 21 percent to Rs 85,656 crore for FY20 compared to Rs 70,990 crore for FY19.

Average current account deposits grew by 17 percent to Rs 33,699 crore for FY20 compared to Rs 28,742 crore for FY19. TD Sweep deposits as on 31 March, 2020 were 6.6 percent of the total deposits.

CASA ratio as on 31 March, 2020 stood at 56.2 percent compared to 52.5 percent as on March 31, 2019.

Provisions and contingencies surged to Rs 1,047.47 crore in Q4FY20 as compared to Rs 171.26 crore in Q4FY19 while the sequential rise was 135.9 percent.