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<b>Letters:</b> All for profit?

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Business Standard New Delhi
Last Updated : Jan 20 2013 | 2:39 AM IST

Banks have claimed that they spend on technology and are, thus, entitled to increase charges. They have also claimed that the deregulation of savings interest rates will force them to reduce the number of free services being provided to customers. However, none of the banks have quantified this assertion. If the savings interest rate is increased by one per cent, what will be the impact on profit after tax (PAT)? Will it go down from Rs 1,000 crore to Rs 800 crore or will it go down to Rs 100 crore? The Reserve Bank of India (RBI) should monitor this impact carefully and closely and if necessary intervene to put a cap on charges. The Damodaran Committee has made similar observations.

It is important for RBI to see that banks don’t increase charges till the impact on profitability is observed for a couple of years at least. Customers have waited for four decades for this deregulation; banks can surely wait for two years.

Saurabh Sharma, Chennai

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First Published: Oct 26 2011 | 12:08 AM IST

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