The monetary regulator, Reserve Bank of India, urged big banks to introduce high interest rate policies for savings bank deposits in order to attract low income customers. It said that smaller banks in private sector have already introduced low income customer centric interest rates for savings bank segment.
RBI Governor, D Subbarao, while attending IOB Platinum Jubilee Oration Series in Chennai said, "The big banks have yet to respond to this...Reserve Bank looks forward to more active play in the Saving Bank segment with banks coming out with some customer friendly innovations especially aimed at attracting low income households, presently outside the banking sector."
He further added that after the deregulation of savings bank rates last year, seven small private banks have responded and raised their savings bank rates and have "expectedly improved their share of this market segment".
It is to be noted that last year, the country's central bank deregulated the rates in savings bank segment and made it mandatory for banks to provide customers in this segment with consistent interest rates up to Rs. 1,00,000. For savings accounts with more than Rs. 1, 00,000, banks were given the freedom to apply different rates and charges.
Subbarao explained that this was done to safeguard the interests of small customers with less knowledge and low bargaining power.