Sub 7 Day FD Scheme: According to a recent report by SBI Research, the effect of rapid reduction in interest rates puts pressure on the deposit rate. This is making it difficult for banks to raise money.
FD Interest Rate: Steps are being taken continuously by banks to attract more and more customers. Now the day is not far when banks will be able to make FDs of less than 7 days. RBI has sought suggestions from banks about starting FDs with tenures of less than seven days. According to sources, banks have to give their response in this regard by the end of this month. A bank official said, ‘Through this step, banks can decide their own period, which will make FDs more attractive than the current one. This can increase liquidity in the banking system.
RBI alert on fall in deposit rate
This step has been taken by the RBI after the growth rate of deposits has decreased in the last few years. Let us tell you that till May 2, 2025 this year, the deposit growth rate was at 10%, which was at 13% last year. According to a recent report by SBI Research, the effect of rapid reduction in interest rates puts pressure on the deposit rate. This is making it difficult for banks to raise money. In the year 2004, RBI had reduced the minimum period of domestic and non-resident ordinary (NRO) FDs from 15 days to one week.
Discussion held with SBI and PNB
According to the news published in ET, the Reserve Bank held separate discussions with State Bank of India (SBI), Punjab National Bank (PNB) and Axis Bank on this matter last month. An official also said that these discussions are still in the initial stages. It has not been decided by the central bank yet whether banks should be given complete freedom to decide the deposit period. It is expected that the Indian Banks Association (IBA) will give its opinion after talking to all the banks by the end of the month. It is being told that the banks have different opinions on this proposal of RBI. Some banks do not agree to remove the minimum period of seven days.
What will be the effect?
A senior official of a public sector bank said that companies can benefit from FDs of less than seven days. Some companies want better returns on depositing money for a short period. But this can be difficult for banks, because it is not easy to give loans for such a short period. Even now, most of the loans of seven to ten days are for foreign exchange transactions. Experts say that this step can bring changes in the banking system, but its risk will also have to be focused on. This proposal of RBI can bring new opportunities for both banks and customers.
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