Dr. Raghuram G. Rajan, RBI Governor, in the Second Quarter Review of Monetary Policy 2013-14, unveiled a very bank customer friendly initiative.
Commercial Banks have been given the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.
Till today, banks were required to pay interest on savings deposits and term deposits at quarterly or longer intervals.
The chief guiding for such a customer friendly initiative is the fact that all commercial banks are on CBS (Core Banking Solution), which makes interest calculation an automated activity.
The Banks CBS should be able to carry out the modified interest calculation activity without much tweaking.
The challenge would be for Banks to decide the periodicity of payment of interest, and to convey to customers, that their option is the best in the market.
Look out for innovative banking products in the near future.
Personally, I prefer to receive interest at longer intervals, rather than shorter intervals. What is your opinion?
- Soon, banks may pay interest at shorter intervals (news.in.msn.com)
- RBI allows banks to pay interest at shorter intervals (thehindu.com)
- Bank Deposit Account in India (susiltripathy.wordpress.com)
- RBI rate hike: Bankers remain ambivalent (thehindu.com)