RBI – Deregulation of Savings Bank Deposit Interest Rate


RBIDeregulation of Savings Bank Deposit Interest Rate

The ball has started rolling for de-regulation of Saving Bank interest rates in our country. Today RBI released a Discussion Paper on Deregulation of Savings Bank Deposit Rate.

The same can be accessed @ http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=24308

This is in continuation of the road-map for deregulation of saving bank interest rates, as mentioned in Second Quarter Review of Monetary Policy 2010-11 on November 2, 2010.

Over the last couple of months, there was been discussion in various forums on the Deregulation of Savings Bank Deposit Rate.

To formalize the opinions of the various stake-holders, RBI released the Discussion Paper, inviting feedback from the stake-holders. The last date for submission of Suggestions and comments is May 20, 2011.

Over the next couple of weeks, there will be heated discussions in the paper and electronic media amongst the pros and cons of the Deregulation of Savings Bank Deposit Rate.

One interesting point is that RBI released the Press Release today morning i.e 28/04/2011, and by afternoon, the article was disseminated in the internet.

This is really fast, and reflects the maturity of the internet media.

I am just digesting the prospects, and will blog more on this in the next couple of weeks. I will be biased towards the Bank’s customers, as in the long run, they have to be happy, for the Banking industry to grow.

4 thoughts on “RBI – Deregulation of Savings Bank Deposit Interest Rate”

  1. The deregulation of interest of SB interest. In some ways we are following the western world, where there is interest on Savings bank is paid. Now we are increasing the SB rate. The overall impact will be our cost of funds will be more, which attracts inflow of low cost of funds into India and Outside investment will be more attracted and our economy will be going into multi nationals whose investment cost will be less.

  2. Recently the Savings bank interest calculation is shifted to daily basis. Now the enhancement of rate of interest will increase the cost of the funds for banks. The interest rate on advances will be go up adding to inflation.

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