The Hindu Business Line : Panels to submit report on deregulation of rates soon: says IBA

INDIAN Banks' Association (IBA) has set up two technical groups that will weigh the possibility of deregulating rates, including that paid by banks to savings account holders.

The two technical groups, set up about a month ago, comprise 14 members chosen from various banks; their reports are expected shortly.

The move is aimed at assessing the need for deregulation and the likely impact of such a measure on the banking industry, said Mr H.N. Sinor, Chief Executive of IBA. He was addressing newspersons on Thursday in connection with BANCON 2005, the bankers' conference slated to begin on Friday.

The savings bank rate - currently pegged at 3.5 per cent per annum - is among the handful of `administered' rates offered to customers. IBA's view on the matter may be seen against the backdrop of the rapidly advancing theory that such rates should be freed from all strictures.

For the banking industry, savings accounts (which collectively account for a critical part of the total deposits with banks) present a relatively low-cost means of accessing funds.

The savings bank rate, which has been steadily decreasing in recent years, has stayed at the 3.5 per cent level for some time. A section is of the opinion that banks should be allowed to set their own rates, especially so in the current liberalised environment.

As for BANCON 2005, Mr Sinor pointed out that the theme for the conference - "Indian Banking: Opportunities at the bottom of the pyramid" - has been chosen keeping in mind "the need to go back to the roots".

The two-day event will deal with themes such as micro-finance & rural development, agricultural finance and banking for SMEs. There will be a session on providing finance to the informal sector as well, especially to segments that have limited access to banking services.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ICICI Bank raises $500 m thru' overseas bond issue

Union Bank gets Golden Peacock award

Rupee firms up; securities rise

Surge in purchase of liability cover by IT, BPO entities

FDI boost: Transfer of financial services co shares may come under automatic route

RBI shuffles Deputy Governors' portfolios

RBI to implement revised credit deposit ratio norms

ICICI Bank to see more growth in private banking portfolio

Banks not to charge fee from exporters

SIDBI sanctions Rs 527 crore as micro credit

Panels to submit report on deregulation of rates soon: says IBA

`Rise in repo, reverse repo rates may restrict inflation'

Govt's move on FDI — Actis may take part in asset reconstruction

`FDI will enhance liquidity for ARCs'

Act to be amended for creating market for securitised debt

`Banks may explore pref shares option'

Usha Thorat takes over as RBI Deputy Governor