Senior citizens are not too happy with public sector banks cutting the additional interest which banks pay on fixed deposits. Many senior citizens don't have pension benefit and they highly depend on interest from fixed deposits for their upkeep.
Last week, State Bank of India announced reduction in the premium on senior citizens' fixed deposits to 25 basis points from 50 basis points. Following this, Punjab National Bank also reduced interest on fixed deposits for senior citizens.
The reduction in the additional interest rates on FD for senior citizens is coming at a time when the common man is struggling with the steady rise in the prices of food, transportation and healthcare, impacting the purchasing power.
With country's largest lender, SBI reducing the interest rates, other banks are likely to follow.