Govt says it'll protect interest of senior citizens while revising rates

Finance Ministry today said the interest of small savers, especially of senior citizens and girl child, will be kept in mind while reviewing the deposit rates for schemes in light of falling bank interest rates.

"The interest of small savers, the interest of senior citizens, interest of girl child scheme, all these aspects will be taken into account. Social security component of small savings schemes is very important and government will keep that in mind," Economic Affairs Secretary Shaktikanta Das told reporters here.

The Finance Ministry had last week said it would review the small savings schemes, which includes PPF and post office deposits.
 

There has been a call from bankers to lower interest rate on small savings as a high rate on such schemes run by the government makes fixed deposits of banks uncompetitive.

With small saving deposits commanding a rate of 8.7-9.3%, banks have been reluctant to transmit the entire policy rate reduction by RBI to borrowers.

They want to keep their deposit rates attractive to match those in small saving schemes, popular among masses.

Finance Secretary Ratan Watal said: "We have to see that the savings rate doesn't get impacted."

India's domestic savings rate has come down to around 30% of GDP, from a record high of 36.8% due to slowdown in the economy.

Smalls saving schemes include Post Office Monthly Income Scheme (MIS), Public Provident Fund (PPF), Post Office Time Deposit Scheme, senior citizen's Savings Scheme, Post Office Savings Account and Sukanya Samriddhi Accounts.