Pitch Raised For Savings Rate Cut

RBI ANNUAL REPORT FOR 2002-03

The Reserve Bank of India (RBI) has once again made a pitch for bringing down the small savings rate.

In its annual report (2002-03), the central bank said the money mobilised through small savings and provident funds have been at higher rate of interest than the market borrowings through dated securities.

The rate of interest on money mobilised through small savings and PFs were at 11.08 per cent, while through market borrowings it is at 10.69 per cent.

The interest rates on borrowings through small savings and PFs have shown a dip of 17 basis point (100 basis points is one per cent) from 11.25 per cent in 2001-02.

In contrast, interest rates on market borrowings were down sharply by 63 basis points from 11.32 per cent.

The RBI said: