Deregulation of Savings Bank Deposit Interest Rate (India) – Guidelines
The first clarification under Deregulation of Savings Bank Deposit Interest Rate has been issued by Reserve Bank of India.
The Notification No is RBI/2011-12/368-DBOD.Dir.BC. 75/13.03.00/2011-12 dt.25/01/2012 can be viewed at Clarification
In brief, the notification states that the interest rates applicable on domestic savings bank held by residents will be determined on the basis of end-of-day balance in the account.
Hence, Banks while calculating interest on domestic savings bank deposits will be required to apply the uniform rate set by them on end-of-day balance up to Rs. 1 lakh and for any end-of-day balance exceeding Rs.1 lakh, banks may apply the differential rate(s) as fixed by them.
The clarification was necessary as Bankers had been approaching RBI for clarifications. As the clarifications are not on public domain, it will difficult to guess the nature of the clarifications.
Maybe the time has come for Banker’s clarifications to be placed on the public domain, atleast in cases wherein Banks themselves have sought clarifictions.
Clarification on regulation of interest rates for Small Savings Schemes
Reserve Bank of India‘s Department of Government and Bank Accounts has issued a clarification on the applicable interest rates for Small Savings Schemes.
The notification no is RBI/2011-12/359 DGBA.CDD. No.H- 4836 /15.02.001/2011-12 dt.
January 20, 2012 and is addressed to
The Chairman and Managing Director/Managing Director
Head Office, Government Accounts Department
State Bank of India/State Bank of Patiala/
State Bank of Bikaner & Jaipur/State Bank of Travancore/ State Bank of Hyderabad/
State Bank of Mysore/ Andhra Bank/ Allahabad Bank/Bank of Baroda/Bank of India/
Bank of Maharashtra/Canara Bank/Central Bank of India/
Corporation Bank/Dena Bank/Indian Bank/ Indian Overseas Bank/
Punjab National Bank/Syndicate Bank/UCO Bank/
Union Bank of India/United Bank of India/ Vijaya Bank/IDBI Bank Ltd./ICICI Bank Ltd.
The complete notification can be accessed @ RBI
The highlights are :
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As per the decision of the Government on the recommendations of the Committee for Comprehensive Review of National Small Savings Fund (NSSF), the rate of interest on small savings schemes will be aligned with G-Sec rates of similar maturity with a spread of 25 basis points (bps), with two exceptions.
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The spread on 10 year National Savings Certificate (NSC) will be 50 bps and on Senior Citizens Savings Scheme, 2004 (SCSS, 2004) 100 bps
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The interest rates for every financial year will be notified before April 01st of that year.
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Notifications on changes in the interest rates, in various small savings schemes with effect from December 01, 2011 have already been issued by Government of India.
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There is no truth in newspapers report, which convey an impression that the interest rates on small savings schemes linked to G-Sec rates, are floating in nature and will undergo change depending on the yields on G-Sec during the currency of an instrument.
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As per the rules of small savings schemes, the rate of interest on an investment made in all schemes except PPF, 1968 on a particular date, remains unchanged for the entire duration of the investment, till maturity, irrespective of the revisions in subsequent years.
In simple terms, the interest rate will be locked in for duration of the Deposit scheme, and will not fluctuate during it’s lifetime.
The Rajkot Nagrik Sahakari Bank Ltd., Rajkot – Penalised
Vide a Press Release dt.06/0.1/2012, Reserve Bank of India, has informed that it has imposed a monetary penalty of Rs5.00 lakh (Rupees five lakh only) on The Rajkot Nagrik Sahakari Bank Ltd., Rajkot.
The complete Press Release can be accessed @
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=25745
The monetary penalty was imposed
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for doing activities akin to travel agent,
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letting out its premises to shops, doll museum etc.,
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not adhering to clean note policy
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and not preparing the balance sheet in the format meant for co-operative banks as prescribed under Banking Regulation Act, 1949 (AACS).
The bank is 55 years old and it was established in 1953, with initial capital investment of Rs 4890. Initially there were 59 members of the bank under the leadership of Late Keshavlal Amrutlal Parekh. Parekh was the first chairperson of the bank with Late Janmashankar Antani as managing director.
The Bank has currently 33 branches, with RTGS/NEFT facility available at all it’s branches.
There is chowk named after Janmashankar Antani in Rajkot, and it is known as Janmashankar Antani Chowk.
Rajkot in Gujarat-India, is famous for The Rotary Dolls Museum ( RDM ) :
The Rotary Dolls Museum ( RDM ) gives an overview to the culture and traditions of the world at large through a medium of dolls.
The Rotary Clubs across the world have generously donated these Dolls to the Rotary Club of Rajkot Midtown. The project is cosponsored by Rajkot Nagrik Sahkari Bank ltd. and it is managed by Shri Arvindbhai Maniar Jankalyan Trust. This Trust was one of the main reasons for RBI imposing a monetary penalty on it. So, in the near future, the Doll Museum, will have to find a new home.
Rajkot, was part of Saurashtra state from 15 April 1948 to 31 October 1956 before merging in bilingual Bombay State on 1 November 1956 and than in 1960, it got merged into Gujarat State.
The Gondal Nagrik Sahakari Bank Ltd., Gondal – Penalised.
A monetary penalty of Rs5.00lacs has been imponsed on The Gondal Nagrik Sahakari Bank Ltd., Gondal by Reserve Bank of India.
The steep penalty was necessitated due to :
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for granting loan to Directors,
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not correctly reporting loans to directors to Reserve Bank of India in the statutory returns on advances to directors and
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not submitting Cash Transaction Reports (CTRs) to Financial Intelligence Unit-India (FIU-IND), New Delhi.
Gondal is part of the Indian state of Gujarat around 60 km from the district headquarter of Junagadh.
Gondal is connected to Rajkot, a major transport hub, by a good road network.
Gondal was a princely state, and hence the major sight seeing places are its palaces.
The Naulakha Palace is the oldest extant palace in Gondal, dating back to the 17th century. The palace is full of legendary stone carvings with exquisite “jharokhas” (balconies), a fabulous pillared courtyard, delicately carved arches, and a unique spiral staircase. The large chandelier-lit “durbar” hall (court house) witnesses stuffed panthers, gilt wooden furniture, and antique mirrors. The Private palace museum displays an impressive display of silver caskets which were in the services of carrying messages and gifts for Maharajah Bhagwat Sinhji on his silver jubilee as ruler of Gondal.
The Royal Garages have an extensive collection of vintage and classic cars including a 1910 New Engine, a Delage and a Daimler from the 1920s, a 1935 Mercedes, 1935 Packard two-door convertible, 1941 and 1947 Cadillac, 1955 Cadillac limousine, sports cars from the 1950s and 1960s like the Mercedes 300 SL, Jaguar XK 150 and Chevrolet Camaro, numerous imposing American cars of the 1940s and 1950s, a fleet of four-wheel drive vehicles from the World War II and post-war period, and some contemporary sports cars. .
