Banking and monetary regulator Reserve Bank of India has announced the deregulation of interest rates of savings bank accounts in regional rural banks (RRBs) too.
With these rates already been deregularized for commercial banks recently, the new move will now bring benefits for depositors with RRBs too.
However, while announcing the deregulation, the apex bank has undermined two conditions for RRBs while setting interest rates for their customers.
The first condition says, "each bank will have to offer a uniform interest rate on savings bank deposits up to Rs 1 lakh, irrespective of the amount in the account within this limit".
The second condition read that for deposits over Rs 1 lakh, banks are free to set differential interest rates.
However, on two similar accounts, no discrimination should be made in terms of interest rates, said the RBI.