After SBI, Kotak Mahindra Bank cuts savings rate by 0.50%

New Delhi: A day after announcement of RBI's bi-monthly monetary policy review, Kotak Mahindra Bank on Thursday decided to slash interest on savings account deposits by 0.50 percent to 5.5 percent on balance between Rs 1 crore and Rs 5 crore.

However, the bank will continue to offer 6 percent interest for savings account balance above Rs 1 lakh and up to Rs 1 crore, 5.5 percent interest on balance above Rs 5 crore and 5 percent interest on balance up to Rs  1 lakh.

The Reserve Bank yesterday cut its key lending rate by 0.25 percent - first time in 10 months - to about 7-year low of 6 percent, a move which is likely to translate into lower interests rates for home, auto and other loans as also boost economic activity.

Country's largest lender State Bank of India had earlier reduced interest on savings account deposits by 50 basis points to 3.5 percent on balance up to Rs 1 crore.

However, the bank will continue to offer 4 percent interest on savings account balance of Rs 1 crore and above.

"The bank is introducing two-tier saving bank interest rate with effect from July 31. While balance above Rs 1 crore will continue to earn interest at 4 per cent per annum, interest at 3.5 percent will be offered on balance of Rs 1 crore and below," SBI had said in a regulatory filing.