GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF ECONOMIC AFFAIRS

LOK SABHA

UNSTARRED QUESTION NO.1 084

To BE ANSWERED oN FRtDAy 29tH ApRtL, 2016

,.INTEREST RATE ON SMALL SAVINGS/DEPOSITS'' 

Willthe Minister of FINANCE be pleased to state:- 

(a) Whether the Government has recently reduced the rate of interest on various savings/deposits schemes including the popular Provident Fund, Kisan Vikas Patra and Senior Citizen deposits adversely affecting poor and middle class and if so, the details thereof and the reasons therefor: and

(b) The steps taken/being by the Government to encourage/promote household savings and deposits in banks in the country?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE

(sHRr JAYANT SrNHA) 

(a) Sir, high small savings interest rates limit the banking sector's ability to lower deposit rates in response to the monetary policy (lowered repo rate) of the Reserve Bank of India. ln the context of easing the transmission of the interest rates in the economy, the Government has taken a comprehensive view on the social goals of certain National Smafl Savings Schemes. Accordingly, from 1.4.2016, the rates of interest stand revised as under:-

The interest rates of all small savings schemes would henceforth be recalibrated on a quarterly basis, to align the small saving interest rates with the recent market rates of the relevant Government securities.

This is expected to help the economy move to a lower overall interest rate regime eventually and thereby help all, particularly, poor and middle class.

(b)The Government has taken various steps to popularise all the existing schemes by carrying out publicity through print and electroniciAudio Visual media on an all lndia basis. Jan Dhan Yojana is a scheme of the Government to encourage deposits in banks and promote savings.