Here're key points to know about the new SBI rules:
will use RBI's policy repo rate
as a benchmark to set the savings deposit rates and those for short-term loans
from May 1. This means, your EMIs and deposit interest rates will fluctuate as and when RBI changes the repo rate (rate at which commercial banks borrow money from the RBI).
The new rules are limited to savings bank deposits with balances of more than Rs 1 lakh and short-term rules. "SBI
will exempt savings bank account holders with balances up to Rs 1 lakh and borrowers with CC/OD limits up to Rs 1 lakh from this. This has been done to insulate them from the movement of external benchmarks," SBI said.
Term deposits will continue to be priced on the basis of market conditions.
4. Cash credit (CC) accounts and overdrafts (OD) of more than Rs 1 lakh will be linked to the repo rate.
5. SBI will become the first bank to switch to an external benchmark to decide rates.