The annual monetary policy for this fiscal announced on May 03, 2011 brought with it a rise in the interest rates of savings account deposits. Savings bank depositors now have a reason to cheer for their deposits in these accounts would earn them interest of 4% as compared to 3.5% which it had been earning since the past eight years.
The last time savings bank account rates were updated was way back in the year 2003 when it was raised to 3.5% from 3% prior to that.
However, it has been clarified that the interest rate hike is in no way an indicator that deregulation is on the cards.
The clarification was made by RBI Deputy Governor, Dr Subir Gokarn.
Speaking on the rise, Ms Nupur Mitra, Executive Director, Indian Overseas Bank said that this rate hike would bring only marginal impact on the bank's profitability.