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Topic : Investment options for Middle Class
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Will the move to cut deposit rates by SBI impact deposit mobilisation drive of the middle class people of India???

Created by : Rashmi Chawla, Cust. Service Manager, Leading Bank  | 11 11 2009 13:50:39 +0000
Industry : BankingFunctional Area : Personal Finance(Personal Interests)
Keywords : india deposit sbi middle class people
Activity:  744 views;  last activity : 07 06 2010 20:18:09 +0000

The country's largest lender State Bank of India has lowered deposit rates by 25-50 basis points on amounts less than Rs 1 crore effective Nov 9. The new interest rate for a deposit of 15-45 days would be 2.5 percent, down from the current 2.75 percent, while the rates for 181 days to less than a year deposits have been cut by 50 basis points to 5.25 percent.Long-term deposit rates of three years to 10 years have, however, been left unchanged. State Bank of India (SBI) has lowered its deposit rates by 25 basis across all maturities and has withdrawn the special 1,000-day deposit scheme. This will be effective from november itself.
SBI chief financial officer SS Ranjan said the move to cut deposit rates would not impact deposit mobilisation drive. Middle Class people are main depositors to these bank.

What do you think, Will this move to cut deposit rate restrict these people from further investment to these banks??

  
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No it is not gonna impact the larget population as they do not have access or have limited knowledge about other investment options,hence they would prefer to get what even returns Banks give.

SBI's customer base is more of Govt Organisations / PSU employees and they would still prefer to keep the deposits with them.
By Kiran Jain, Senior manager Key Corporates, HDFC Bank Ltd  11 11 2009 14:30:42 +0000
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these days customers are spoilt for choice ,every bank is offering competitive rates so as to gain substaintial market share ,but  other psu's would be the very next choice if they were to be following sbi's suit then ,it will give private banks a chance to present there best bid to attract customer for them it would be golden opportunity to win customer credentials back ..another factor to be considered is that banking industry is sort of perfect competition market ,single entity has to be at a receiving end .reverse flow of customer might be the next thing on the board for private banks.or it is sign of stimulus withdrawal.
By kawaljit kaur, pgdbm student , Mount Carmel Institute of Management  | 11 11 2009 17:50:07 +0000
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Indians are traditionally savings oriented people. If they find their savings provide less income in future, they will  have to diversify their investments to other investment options like Shares, Bonds,debentues etc.
By Rashmi Chawla, Cust. Service Manager, Leading Bank  | 11 11 2009 13:50:39 +0000
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For an investor who is ready to invest in Bank FD, these changes in deposit rates, that too, when the trust levels in the financial services market still remains at lower level, may not matter much. So, I don't feel there will be any impact.
By SHARATH CHANDAR REDDY, Business Development Manager - Insurance, I T C Ltd  | 11 11 2009 16:00:30 +0000
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State Bank customers hold  their trust in these banks. These cut rates are for short term deposits only. Long term deposits still enjoys the same deposit rates. After all, these changes are only temporary. It will be back to normal.
By Esha Johar, Risk Analyst, Irevna  | 11 11 2009 14:02:43 +0000
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