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Full Text of 2nd Quarter Review of Monetary Policy 2011-12 click here
Second Quarter Review of the Monetary Policy for 2011-12
-Announced on the 25th October 2011
Part B. Developmental and Regulatory Policies
I. Interest Rate Policy
Deregulation of Savings Bank Deposit Interest Rate
65. As indicated in the Second Quarter Review of November 2010, the Reserve Bank prepared a discussion paper on ‘Deregulation of Savings Bank Deposit Interest Rate’, which was posted on its website in April 2011, for public comments/suggestions. The discussion paper spelt out both the pros and cons of deregulating the savings bank deposit interest rate. The discussion paper evoked wide-ranging responses from a cross-section of stakeholders, ranging from the suggestion that savings bank deposit interest rate should not be deregulated at all to the suggestion that it should be deregulated completely. The Reserve Bank has examined the suggestions received and weighed the pros and cons of deregulation of the savings bank deposit interest rate. On balance, it is felt that the time is appropriate to move forward and complete the process of deregulation of rupee interest rates. Accordingly, it has been decided:
• to deregulate the savings bank deposit interest rate with immediate effect; banks are free to determine their savings bank deposit interest rate, subject to the following two conditions:
First, each bank will have to offer a uniform interest rate on savings bank deposits up to `1 lakh, irrespective of the amount in the account within this limit.
Second, for savings bank deposits over `1 lakh, a bank may provide differential rates of interest, if it so chooses. However, there should not be any discrimination from customer to customer on interest rates for similar amount of deposit.
66. The operational guidelines in this regard will be issued separately.
Second Quarter Review of Monetary Policy 2011-2012... click here
Highlights of 1st Quarter Review of Monetary Policy 2011-2012... click here
Macroeconomic & Monetary developments: Second Quarter Review 2011-12... click here
RBI CREDIT AND MONETARY POLICIES (1999-2012)... click here
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