RBI frees savings bank interest rate, depositors may get more

October 25, 2011 12:50

Details on the deregulation of savings bank interest rates by the RBI today. The Reserve Bank today freed savings bank deposit rates, a step which bankers said could fetch better returns for depositors as competition will intensify.
"...banks are free to determine their savings bank deposit interest rate," the Reserve Bank of India (RBI) said, adding the change will come into force with immediate effect.
While freeing interest rates on savings bank accounts, the RBI has said that banks will have to offer a uniform interest rate on deposits of up to Rs 1 lakh.
For savings bank deposits of over Rs 1 lakh, banks would be free to provide differential interest rates. Till now, banks were mandated to give 4 per cent interest rates on such deposits.

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