Kotak Mahindra Bank on Friday reduced the interest rate on savings accounts with balance of up to Rs 1 lakh by 50 basis points (bps) to 4.5% per annum. The new rates will be effective from April 15, 2019.
While the interest rate on the savings accounts with deposit of up to Rs 1 lakh has been reduced to 4.5%, the bank will continue to pay 6% interest on savings accounts with balance from Rs 1 lakh to Rs 1 crore and 5.5% interest on savings accounts with balance of above Rs 1 crore, according to official website of the lender.
“We were the first ones to move to 6% interest rate on savings bank accounts when the Reserve Bank of India (RBI) had deregulated savings bank interest rates. However, what we have seen is that there is a huge inertia in people to move their bank accounts,” Virat Diwanji, president of retail liabilities and branch banking at Kotak Mahindra Bank, told FE.
On 6% interest rate on savings accounts, Diwanji said, as long as the bank can grow twice the industry rate, it will continue to offer up to 6% interest. This allows the bank to acquire more customers.