The country’s largest lender State Bank of India (SBI) on Friday has cut its deposit rates for maturities of over one year by 0.25%. SBI is the third bank after private sector lenders ICICI Bank and HDFC Bank reduced their deposit rates during the week. In fact, this is the fourth time SBI has trimmed deposit rates in the last five months. With tepid credit growth, banks have surplus money. SBI has excess liquidity of Rs 70,000 crore. SBI chairman Arundhati Bhattacharya had recently said that loan rates would start trending downwards through a compression of spreads but had added that deposit rates also needed to come down. Private sector lender Axis Bank has also cut rates by up to 75 bps on term deposits below one year and by 15-25 bps in select maturities above one year, effective December 8. HDFC Bank Managing Director Aditya Puri said: “I’ve reduced my fixed deposit rates and you will see by March or so, (our) base rate will come down.” The fall in interest rates is beneficial for banking and NBFC’s as their borrowing cost is lowered. Positive for banks including SBI, Axis, Yes Bank, etc and NBFC’s including Bajaj Finance, M&M Finance, DHFL, etc.
FM dangles Rs 13k-cr carrot to clear GST bottlenecks:
The minister, even as he is walking the tightrope to contain the government’s fiscal deficit, might propose to clear about a third of states’ Rs 34,000-crore CST dues in the first supplementary demand for grants, to be tabled in the current Parliament session. The empowered committee of state finance ministers is to discuss the draft Constitution Amendment Bill for implementation of GST at their meeting on Thursday. Later that day, Jaitley will meet the state FMs and try to reach a broad understanding on crucial issues. That will be against the backdrop of Prime Minister Narendra Modi’s Sunday meeting with chief ministers where he emphasised the need for states’ greater role in the proposed body to replace the Planning Commission.
States must have greater role in new Plan body: Prime Minister Narendra Modi
The process of policy planning also has to change from “top to bottom” and “bottom to top”, he said, stressing that it was impossible for the nation to develop unless states develop. Modi said the replacement to the Planning Commission must incorporate the concept of “Team India”, which according to him, was a combination of three teams – the Prime Minister and Chief Ministers; the Union Council of Ministers; and the bureaucracy in the Centre and states. “Can we develop a new mechanism, that plans according to India’s strengths, empowers states, and brings on board all economic activity, including that which happens outside the government,” the Prime Minister asked.