Lok Sabha Question No. 1084 (UNSTARRED), answered on 2016-04-29
Subject: Interest Rate on Small Savings/ Deposits
Ministry: FINANCE
Asked by: RAM KUMAR SHARMA KUSHWAHA, ANANT KUMAR DATTATREYA HEGDE, C. N. JAYADEVAN, SUSHIL KUMAR SINGH, ADVOCATE NARENDRA KESHAV SAWAIKAR, NAGARAJAN P., ASHWINI KUMAR, JYOTIRADITYA MADHAVRAO SCINDIA, KAMAL NATH

No.1084.

SHRI RAM KUMAR SHARMA:

SHRI ANANTKUMAR HEGDE:

SHRI C.N. JAYADEVAN:

SHRI SUSHIL KUMAR SINGH:

ADV. NARENDRA KESHAV SAWAIKAR:

SHRI P. NAGARAJAN:

SHRI ASHWINI KUMAR:

SHRI JYOTIRADITYA M.SCI NDIA:

SHRI KAMAL NATH:

Willthe Minister  of FINANCE  be pleased  to state:-

- (a) Whether the Government has recently reduced the rate of interest on various savings/deposits schemes including  the popular Provident Fund, Kisan Vikas Patra and Senior Citizen deposits adversely  affecting poor and middle class and if so, the details thereof and the reasons  therefor: and
- (b) The steps taken/being  by the Government  to encourage/promote  household savings and deposits in banks in the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (sHRr JAYANT SrNHA)

- (a) Sir, high small savings interest rates limit the banking sector's ability to lower deposit rates in response  to the monetary  policy (lowered repo rate) of the Reserve  Bank of India.

ln the context  of easing the transmission of the interest rates in the economy, the Government has taken a comprehensive  view on the social goals of certain National Smafl Savings Schemes.  Accordingly, from 1.4.2016, the rates of interest  stand revised  as under:-

| Instrument          |   Rate of interest w.e.f. 01.04.2015 to 31.3.2016 { effective annual rates) | Rate of interest w.e.f. 01.04.2016 to 30.6.2016 ( effective annual rates)   |
|---------------------|-----------------------------------------------------------------------------|-----------------------------------------------------------------------------|
| Savinos Deoosit     |                                                                         4   | 4"0                                                                         |
| 1 Year Time Deposit |                                                                         8.7 | 7.3                                                                         |
| 2 Year'Time Deposit |                                                                         8.7 | 7.4                                                                         |
| 3 Year Time Deposit |                                                                         8.7 | 7.6                                                                         |
| 5 Year Time Deposit |                                                                         8.7 | 8.1                                                                         |

## GOVERNMENT OF INDIA

## MINISTRY  OF FINANCE

## DEPARTMENT OF ECONOMIC  AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO.1 084

To BE ANSWERED oN FRtDAy 29tH ApRtL, 2016

,.INTEREST  RATE ON SMALL SAVINGS/DEPOSITS''

| 5 Year Recurrino Deoosit              |   8.7 |   7.6 |
|---------------------------------------|-------|-------|
| 5 Year Senior Citizens Savings Scheme |   9.6 |   8.9 |
| 5 year Monthly Income Account Scheme  |   8.7 |   8.1 |
| 5 Year National Savinqs Certificate   |   8.7 |   8.1 |
| Public Provident Fund Scheme          |   8.7 |   8.1 |
| Kisan Vikas Patra                     |   8.7 |   7.8 |
| Sukanva Samriddhi Account Scheme      |   9.2 |   8.6 |

The interest rates of all small savings schemes  would henceforth be recalibrated  on a quarterly  basis, to align the small saving interest rates with the recent market  rates of the relevant Government securities.

This is expected  to help the economy move to a lower overall interest rate regime eventually and thereby help all, particularly, poor and middle class.

(b)The Government  has taken various steps to popularise  all the existing schemes by carrying out publicity  through print and electroniciAudio Visual media on an all lndia basis. Jan Dhan Yojana is a scheme  of the Government to encourage  deposits in banks and promote savings.