Mumbai : The Indian Banks Association (IBA) said it has urged the Finance Ministry to bring down interest rates on small savings schemes such as the Sukanya Samridhi and National Savings Scheme, reports PTI.
“We met the Finance Ministry recently and requested that the rate of interest on government’s small saving schemes such as the Sukanya Samriddhi or NSC are at a level from where it should be brought down,” IBA chairman T M Bhasin said.
He said even the Shyamala Gopinath committee report had recommended that interest rate on these government schemes should be at the secondary market yield of government securities plus 25 basis points.
The rates offered in the various small savings schemes are in the range of 9-9.10 per cent currently.
“Since we have to compete with those schemes in smaller areas, we have requested that there should be some re-calibration of rates so that when banks reduce their rates of interest, there should not be any suffering from diversion of funds from the banking system to other avenues,” he said. Talking on the forthcoming monetary policy review on June 2, Bhasin said he expects some easing in the repo rate and also said the bankers have sought a cut in cash reserve ratio.
“As far as bankers are concerned, the preferable mode is more on passing on the CRR cut which gives us some leeway in reducing the rate of interest on advances because we have surplus liquidity available with us in the system as credit offtake is not there,” Bhasin said. “We have always requested RBI that there be some cut in the CRR so that the cost of funds also comes down. We expect 50 basis points cut in CRR,” Bhasin said.
