Savings account interest rate still at 3.5%?
Moneylife Digital Team 12 May 2011

Several major banks have not updated the savings account interest rate on their websites even a week after the Reserve Bank of India hiked it to 4%

All the major banks, which are usually prompt in updating their websites with the changes in interest rates on loans and other schemes, don't seem as interested in updating their customers about the recent hike in the savings account interest rate.

On 3rd May 2011, the Reserve Bank of India (RBI), issued a notification to all banks, including state and central co-operative banks, primary (urban) co-operative banks, scheduled commercial banks, saying that "it has since been decided to increase the interest rate on domestic and ordinary non-resident savings deposits as well as savings deposits under the Non-Resident (External) Accounts Scheme by 0.5%, from 3.5% to 4% annum, with immediate effect." The savings account rate has been hiked after 19 years.

However, it has been more than a week and yet most banks, including state-run banks, have not updated the data about the savings interest rate on their websites, Moneylife found after checking the websites of banks which come under the RBI's regulation.

While it is not mandatory for banks to update their websites regularly, this indicates how much the banks are actually interested in updating their customers, when this involves an increase in the cost of funds for the banks.

State-run banks, including the Central Bank of India and the State Bank of Hyderabad, still show the savings account interest rate as 3.5% on their websites. Although some like the State Bank of India, State Bank of Patiala and State Bank of Travancore, have changed this to 4%.

Axis Bank, Bank of Maharashtra, City Union Bank, Coastal Local Area Bank Ltd and Karnataka Bank Ltd still show the savings account interest rate at 3.5%.

Among the foreign banks that have not bothered to change the rate on their websites are Abu Dhabi Commercial Bank Ltd, Barclays Bank India, BNP Paribas and Chinatrust Commercial Bank.

It was also observed that officials at some of the banks were not aware about the change in the savings account rate announced by the RBI last week. When Moneylife contacted an executive at BNP Paribas to find out the latest savings interest rate, she said that "the general savings account interest rate is 3.5%".

Comments
manju
1 decade ago
so happy

CJyoti
1 decade ago
The usually ignored reality is the wellknown fact is that the Banking sector as such in India is totally small savings-unfriendly, even the leader SBI. The SBI a/c holders in none of the PSU Banks ever get any recognition in India as human beings but rather are subjected to untold harassment and miseries.
The account opening experiene of the majority of ordinary people is harrowing and humiliating, with the clerks misbehaving and even asking the prospective customers to come back later at the convenience of the clerks/managers. The maller the deposits, the greater is the ignominy.
There is no culture in the PSU banks to respond to e-mails oe entertain correspondence through e-mails. At every step, the SB account holder must be prepared to be heckled, insulted, abused and belittled for the smallest mistake and for even having the temerity of trying to get the passbook entries updated. The aversion to use emails as a timesaving way of correspondence is too conspicious.
In West Bengal, this harassment is a daily, nay hourly, incident. The Pension accounts of es-central government and state government officials is no exception to the neglect and disregard of the Bankers.
The attitude of the private and MNC banks is of course worse-rather markedly anti-people. But the govt. is not interested in taking any action against them for private pecuniary gains of ploticians and bureaucrats.
It is now certain that, in a few months, there will be a flood of entry of private players into the banking sector, and more disinvestment in the PSU Banks resulting in more privatisation of these public assets allowed to go to seed.
N Dey
1 decade ago
In the Indian context, where a large part of the entore middle class has become banking conscious, it is a crime against humanity to keep the rate of interest on SB deposits at 3.5%. This apart, there is yet another great anomalaus and discriminatory practice in the banking industry with the support of the RBI. Interest rates are changed from time to time and some time ago, many PSU Banks announced enhanced rates on FDs, with an extra 0.5% for senior citizens. Banks expect the senior citizens, many of them quite old, to came and surrender the old FD certificates (fetching much lower interest) and endorse the same for the enhanced interest rates. Is it it not proper and logical to automatically apply the enhanced rates to the instuments documenting the deposits already made? RBI must consider this as a very large number of people were most mercilessly and cruelly dealt with P.Chidambaram as FN by suddenly reducing the rates of interest on the PO SB deposits made representing the life's savings of those people. If citizens are supposed to be loyal to the State, doesn't the State too have the reciprocal duty to be loyal to its citizens and honour the covenants with the members of the society?
Free Helpline
Legal Credit
Feedback