Govt may announce new interest rates on small savings schemes soon

The government is soon likely to announce rationalised interest rates on small savings schemes, enabling banks transmit the policy rate reduction by the Reserve Bank of India to borrowers.

According to sources, the finance ministry Arun Jaitley is seriously considering the suggestions made by various stakeholders, including banks and other ministries, and brought up during the pre-budget meetings with leading economists and experts, suggesting lower small savings rate.

Finance Minister Arun Jaitley had announced on September 29 that the Centre would review small savings schemes, rationalising and aligning their interest rates with the central bank's regime. This was the same day when RBI Governor Raghuram Rajan had cut policy rate by 50 basis points (bps) from 7.25 per cent to 6.75 per cent, bringing it to a total cut of 125 basis points for the calendar year 2015.

Budget 2016, Banks want govt to focus on public spending over fiscal deficit road map

Banks and financial institutions pitched for a delay in the fiscal deficit road map and for more focus on greater public spending to ensure economic revival, at a Budget 2016 meeting with Finance Minister Arun Jaitley on Tuesday.
The institutions also wanted incentives to encourage cashless transactions through debit/credit cards and rationalisation of interest rate of small savings schemes.
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The two-hour meeting saw heads of the country's public and private sector banks - including State Bank of India, Axis Bank, Bank of Baroda, ICICI Bank, LIC, IIFCL, IDBI Bank, NABARD, Citi Bank and L&T Finance Holdings - discuss key measures that could be introduced in the Budget 2016-17 to ensure economic growth revival.