The government is considering rate moderation for small savings schemes in the upcoming quarter, a development that could lead to speedier transmission of monetary policy rate cuts, sources said.
During the current quarter, the government refrained from cutting interest rates on small savings schemes, such as Public Provident Fund (PPF) and National Savings Certificate (NSC), despite moderating bank deposit rates.
Bankers have been complaining that high rates on small savings schemes prohibit them from cutting deposit rates.
Currently, there is a difference of nearly 100 basis points between deposit rate of banks and small savings rate for one-year maturity.
Earlier this week, RBI Governor