Extra interest rate @0.50% on deposits of Senior citizens

[Vvns Varaprasadrao]

Dear friends,

Who is the competent authority to fix the above rate ?

Whether it is RBI or individual Banks on the advise of IBA ?

Please clarify.

Regards.

[MOHAN P]

Dear Shri Varaprasad Garu,

It is Banks board fix the additional interest rate at 0.50%(or more) for senior citizens and not by GOI or RBI/IBA .

While RBI sets the Repo rate banks have freedom to set their own differential deposit interest rates to attract senior citizens.

As per Master Circular of RBI on the subject :

2.01."Banks have been permitted to formulate, with the approval of their 

Boards of Directors, fixed deposit schemes specifically for resident Indian 

senior citizens offering higher and fixed rates of interest as compared to 

normal deposits of any size. "

Regards

Mohan.P

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[Kalyanasundaram Subramaniam]

1. Banks have been permitted to formulate, with the approval of their Boards of Directors, fixed deposit schemes specifically for resident Indian senior citizens, offering higher and fixed rates of interest as compared to normal deposits of any size. These schemes should also incorporate simplified procedures for automatic transfer of deposits to the nominee of such depositors in the event of death. The above additional interest is not applicable to any type of non-resident deposits.

RBI master circular https://www.rbi.org.in/commonman/english/scripts/Notification.aspx?Id=1066#19

S Kalyanasundaram 

[Vvns Varaprasadrao]

Thank you for the information Sri Mohan Sir.

Namasthe.

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