Monday, November 29, 1999

All interest rates may see deregulation, says RBI

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The Reserve Bank of India is considering to deregulate all interest rates including the savings deposit rate."The direction is clear. We are in favour of deregulating all interest rates, but the decision will be taken only after adequate debate," said KC Chakrabarty, deputy governor , RBI.Currently, the savings rate of banks stands at 3.25%.On being asked whether a huge difference between the savings bank rate among banks post deregulation is possible, Charabarty said, "In highly competitive markets prices do not vary much. What rate a customer gets depends on market conditions. If the rates vary too much then customers will move from one bank to another."Chakrabarty also added that this deregulation, which is a part of financial reforms ,is approved by Parliament.Agreeing with the views of Chakrabarty, C Rangarajan, chairman, Prime Minister's Economic Advisory Council too, has favoured a deregulation in the interest rates. "It is just a matter of time before we see deregulation in savings deposit rates," he noted.

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