Prateek

CORPORATE NEWS ANALYSIS

BY GROUP 7

NEWS ON BANKING INDUSTRY  SBI

cuts deposit rates by 25-50 bps

 Pension

regulator ticks off SBI for not pushing NPS

SBI cuts deposit rates by 25-50 bps 

State Bank of India (SBI), India’s largest bank, will reduce interest rates on term deposits across various maturities by 25-50 basis points (bps).

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The rate for deposits of one year to less than two years will be 6.5 per cent as against 7 per cent offered earlier

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The new rates will be applicable to fresh deposits and those that come up for renewal. The peak rate of 7.75 per cent will be offered for deposits of eight to 10 years.

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SBI’s cost of deposit for 2008-09 was 6.30 per cent, up from 5.59 per cent for 2007-08. The bank has gone for an aggressive deposit rate reduction to protect its net interest margin (NIM).

Pension regulator ticks off SBI for not pushing NPS 

The bank has managed to collect only 19 forms.

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Other public sector banks — which are points of presence (PoPs) for opening of NPS accounts and collection of contributions — were going about the new scheme, the Pension Fund Regulatory and Development Authority (PFRDA) has shot off a letter to SBI Chairman O P Bhatt, asking why the scheme was not being pushed.

Status as on July 25, 2009 POP ICICI Bank Kotak Mahindra SBI

BRANCHES

No. OF FORM COLLECTED

49

164

25

160

26

19

Reason behind the failure 

When approached to open an NPS account, bank executives often fail to explain the details of the scheme, or name the branches where an account can be opened. PoPs, on their part, blame this failure on PFRDA, saying the authority is not making available adequate information.

Statements from PFRDA chairman 

When contacted, PFRDA Chairman D Swarup refused to discuss the performance of the PoPs. He, however, said that the tax benefits offered in the Budget would encourage individuals to invest in the NPS.