Country largest lender, State Bank of India has requested the Reserve Bank of India to reduce the minimum tenure of the fixed deposit to three days from seven days. However, the chances of RBI considering is very bleak.
Earlier this year, SBI launched the unfixed deposit schemes and it was a smashing hit. The bank allows its depositors to withdraw their funds after seven days which is the minimum period for fixed deposits.
SBI was paying interest rate of 8.5 per cent initially but now brought down to 6.5 per cent.
Speaking on this topic, Mr. Pratip Chaudhuri, Chairman and Managing Director of SBI said that he had earlier requested the banking regulators to reduce the tenure of minimum deposits from seven to three days.
"We think a savings bank is not about rate of interests alone. It is about the facilities, the experience and so on. In fact, I am requesting RBI, time and again, that the tenure of minimum deposit be reduced from seven days to three days," Mr. Pratip Chaudhuri said.
The Reserve bank of India has remained non-committal on SBI's request, bankers said. "If the tenure of a minimum fixed deposit is brought down to three days, then it is as good as a current account, which does not offer any interest. RBI has reservations on the request".
SBI also requested RBI to allow banks to offer interest to current account holders. But the present regulation prohibits it.