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.

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

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

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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.

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

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

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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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