RBI is known for its well-calibrated moves. It was sounding the banks for more than a year regarding the pros and cons of empowering the banks to fix their rates of interest on savings bank accounts. It is likely that many banks were already assessing the implications to their respective selves if deregulation happened.
Therefore it is quite surprising that public sector banks are now unable to decide on their strategies even a month after deregulation was announced. Yes Bank justified its name by taking a prompt decision. A few private sector banks reluctantly followed. The private sector behemoths, namely ICICI Bank and HDFC Bank, are still ruminating.
Public sector banks continue to have a preference for administered pricing. RBI on its part could have been more clarificatory. For instance, can the banks provide interest on daily balances or minimum monthly balances or some other criterion of their choice? RBI has stipulated that multiplicity of rates is permitted only for balances above Rs.1 lac. What happens to those accounts which have balances above and below Rs. 1 lac alternately?
Therefore it is quite surprising that public sector banks are now unable to decide on their strategies even a month after deregulation was announced. Yes Bank justified its name by taking a prompt decision. A few private sector banks reluctantly followed. The private sector behemoths, namely ICICI Bank and HDFC Bank, are still ruminating.
Public sector banks continue to have a preference for administered pricing. RBI on its part could have been more clarificatory. For instance, can the banks provide interest on daily balances or minimum monthly balances or some other criterion of their choice? RBI has stipulated that multiplicity of rates is permitted only for balances above Rs.1 lac. What happens to those accounts which have balances above and below Rs. 1 lac alternately?
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