The All India Bank Depositors Association (AIBDA) wants a floor rate to be set for savings account rates by regulator Reserve Bank of India.
With deregulation of the savings account interest rates on the cards, the depositors' body wants healthy competition to prevail along with protection of interest of customers and thus is insisting on the apex bank determining a floor rate.
"The RBI must complete the reform of deregulating deposit interest rates by extending the deregulation to SB deposits...This would strengthen the process of financial inclusion as well as ensure market-based returns to the depositors due to competition among banks," said the AIBDA in a statement.
The association has also suggested that the interest rates set by a bank should be the same for all depositors.
It also suggested that a reasonable service charge should be levied by banks.
"SB deposit rate still continues to be regulated by the RBI.
This has resulted in SB depositors being deprived of market-determined returns even in a liberalised framework of our economy," said the AIBDA.