Mumbai, September 11: Days after the bank mergers were announced by Union Finance Minister Nirmala Sithraman and Reserve Bank of India looking for a change in the repo rate, reports are arriving that the interest rate on popular Public Provident Fund (PPF) and other small savings schemes are all set for a downward revision. Though these schemes are revised every quarter and are dependent on government bond yields, the downward trajectory is something that the citizens might not like, opine experts.
According to a report, published in the LiveMint, schemes like PPF, Senior Citizens Savings Scheme and girl child savings schemes Sukanya Samriddhi account are most likely to be hit. While small savings schemes are set for an interest rate cut by this month-end. As per the plan, the government would decide on the interest rate of small savings schemes for the October to December quarter. Earlier, the interest rates of PPF and other small savings schemes for the current July-September quarter was decreased by 10 basis points. Home Loans to Become Cheaper from October 1! Here's What Banks are Upto After RBI's Latest Direction to Attract New Borrowers
The interest rate for PPF and National Savings Certificate (NSC) for the current quarter July-September quarter are 7.9 percent annually, while for Kisan Vikas Patra (KVP) scheme it stands at 7.6 percent. Apart from this, the interest rate on girl child savings scheme Sukanya Samriddhi account is 8.4 percent, while for the five-year Senior Citizens Savings Scheme its 8.6 percent. Total Bank Frauds in 2018-19 Rose to Rs 71,543 Crore, Up From Rs 41,167 Crore in 2017-18: RBI
With inflation rising in the country and the Gross Domestic Product (GDP) rate declining to 5 (five) percent, the RBI had cut its repo rate by 110 basis points -- so far this year. As the prevailing economic crisis plunging the growth of the nation, analysts expect that the RBI could go for multiple cuts this fiscal to speed-up growth. However, there are rare chances of a big cut in the small savings rate, considering sensitivities involved in small saving schemes.