The recent cut in the benchmark interest rate by the Reserve Bank of India is the second in two months, the first having been made in January. According to economists, these rate cuts augur well for business and boost the economy. Meanwhile, depositors are concerned about the drop in their income due to simultaneous reduction in interest rates on deposits. It is really tough for the small depositors to make both ends meet with reducing income in a climate of soaring prices and rising cost of living. One thing that RBI should do for them is ensure that the banks implement its policy of giving higher interest rate on ‘non-callable deposits’ upto Rs 1 crore i.e. deposits which are made for a fixed term without premature withdrawal facility. At present, all deposits below Rs 1 crore come with a callable or premature withdrawal option. Once this is done, depositors can keep at least part of their money with the banks in such deposits and get some relief.
Rodney de Souza, Assagao
