Jait­ley De­fends SBI’s Rate Cut FM says in­ter­est on sav­ings a/c re­duced due to fall in lend­ing rate but govt scheme will pro­tect sr cit­i­zens’ earn­ings

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New Delhi: Fi­nance min­is­ter Arun Jait­ley has de­fended top lender State Bank of In­dia’s de­ci­sion to cut in­ter­est rate on sav­ing ac­counts of less than ₹ 1 crore, say­ing the move was in sync with re­duc­tion in lend­ing rate. Re­spond­ing to a Zero Hour men­tion of the SBI’s de­ci­sion to cut in­ter­est rate on sav­ing ac­counts with less than ₹ 1 crore de­posit to 3.5% from 4% in the Ra­jya Sabha on Thurs­day, the fi­nance min­is­ter said to pro­tect the in­ter­ests of se­nior cit­i­zens, the gov­ern­ment has al­ready floated a pen­sion scheme that guar­an­tees at least 8% in­ter­est rate. Prime Min­is­ter Naren­dra Modi had an­nounced the Prad­han Mantri Vyaya Van­dana Yo­jana (PMVYY) for se­nior cit­i­zens and re­tired per­sons in De­cem­ber last year, which was launched in May this year. “The ef­fec­tive rate comes to 8.3%,” Jait­ley said. The scheme is man­aged by Life In­surance Cor­po­ra­tion of In­dia.

Jait­ley said high in­ter­est rate on sav­ings and fixed de­posits was the norm dur­ing a time when in­fla­tion was 10-11% and slug­gish­ness was set­ting in the econ­omy. So, when the lend­ing rate came down, so did (in­ter­est rate on) sav­ings ac­count, he said.

To Op­po­si­tion’s de­mand for a dis­cus­sion on the slug­gish­ness in the econ­omy and job losses, the fi­nance min­is­ter said all is­sues can be dis­cussed and de­bated if it al­lowed the House to func­tion from 11 amto 6 pm ev­ery day.

Ear­lier, Derek O’Brien of Tri­namool Congress raised the is­sue through a Zero Hour men­tion say­ing the SBI rea­soned the de­ci­sion (to re­duce in­ter­est rate) to ₹ 1.5 lakh crore mov­ing into the bank­ing sys­tem af­ter de­mon­eti­sa­tion of old ₹ 500 and ₹ 1,000 notes. There was no pick up in bor­row­ing and eco­nomic ac­tiv­ity was low, he said.

Stat­ing that 90% of sav­ing bank de­posits are of less than ₹ 1 crore, the Tri­namool MP said the move to cut in­ter­est rate has af­fected the small de­pos­i­tors, se­nior cit­i­zens and pen­sion­ers the most. The gov­ern­ment, he charged, is not able to re­cover ₹ 7 lakh crore non-per­form­ing as­sets (NPAs) with big cor­po­rates and is hurt­ing com­mon peo­ple with such de­ci­sions.

Jait­ley said the NPA is­sue can be dis­cussed when a bank­ing amend­ment bill comes up for de­bate in the House.

Arun Jait­ley told Ra­jya Sabha that to pro­tect the in­ter­ests of se­nior cit­i­zens, the govt has al­ready floated a pen­sion scheme that guar­an­tees at least 8% in­ter­est DIF­FER­ENT TIMES

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