Dear Comrades,
The Reserve Bank of India (RBI) today directed the banks to provide
the higher interest rates on Public Provident Fund (PPF) and senior
citizens savings scheme (SCSS) from April 1 as announced by the
government.
According to a central bank circular, the rates of interest on PPF
1968 and SCSS 2004 will be 8.8% and 9.3% respectively from April 1. The
new rates would be applicable during this fiscal.
Last month, the government had decided to increase the interest rate on
PPF by 0.2% to 8.8%. The rate for SCSS has been hiked to 9.3% from 9%.
The RBI has also asked the bank to display the new rates for the two
small saving schemes on their notice boards for the information of
subscribers.
The government had earlier raised annual investment ceiling in PPF savings to Rs 1 lakh from Rs 70,000.
The hike in interest rates on small savings schemes is based on the
recommendations of the Shyamala Gopinath Committee which had suggested
linking of interest rates on small savings with that of the market.
The panel had also suggested that the interest rates on small savings schemes should be revised annually.
The revision in the interest rates will help in maintaining the
attractiveness of the small savings schemes vis-a-vis fixed deposit
schemes operated by banks.
The government as part of economic liberalisation process had freed
the interest rates on banks deposits giving freedom to lenders to fix
rates depending upon the asset-liability position, but continued to fix
rates for small savings schemes.
http://business-standard.com/india/news/provide-new-interest-ratesppf-rbi-orders-banks/162250/on
