RBI in Favour of Deregulating Savings Rate

Mr. K C Chakrabarty, Deputy Governor of Reserve Bank of India (RBI) has said that RBI is also in support of deregulating savings bank deposit rates of banks.


Mr. Chakrabarty said already a debate in this regard was held, but the decision will be taken after having adequate debate on the issue.


He said that the savings bank rates are not likely to move in a wide range after the deregulation.


He added at this highly competitive market scenario. Prices do not vary much, but what will be the rate, what customers will get, will depend on market conditions.


Currently, the savings bank rate is at 3.5 % and is the only administered rate in the banking system as of now.


The banks offer this rate to the savings bank customers, which form a major part of their low-cost deposit base.


He said further that the RBI has started to deregulate administered interest rate from 1991 as a part of financial reforms.


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