RBI has released a discussion paper on Deregulation of Savings Bank Deposit Interest Rate

According to a recent press report RBI has released a discussion Paper on ‘Deregulation of Savings Bank Deposit Interest Rate as indicated in the Second Quarter Review of Monetary Policy 2010-11 on November 2, 2010.. In the light of pros and cons of deregulation of savings deposit interest rate as set out in the Discussion Paper, the Reserve Bank has sought feedback from the general public on the following issues:

• Should savings deposit interest rate be deregulated at this point of time?
• Should savings deposit interest rate be deregulated completely or in a phased manner, subject to a minimum floor for some time?
• How can the concerns with regard to savers (senior citizens, pensioners, small savers, particularly in rural and semi-urban areas) be addressed in case savings deposit interest rate is deregulated?
• How serious are concerns relating to a possible intense competition amongst banks and asset-liability mismatches if savings deposit interest rate is deregulated?
• Should higher interest rate be paid on savings deposits without a cheque book facility?

Suggestions and comments can be sent to may please be sent 2011 to the Adviser-in-Charge, Reserve Bank of India, Monetary Policy Department, Central Office, 24th floor, Central Office Building, Mumbai-400001 or by email by May 20, 2011.