The consistently rising interest rate scenario in the Indian economy has made banks to request regulator Reserve Bank of India to defer the deregulation of savings bank rate.

Bankers say that it is likely that with deregulation setting in at the present time, there are chances of unhealthy competition getting prevelant amongst banks.

According to a banker, in case the savings bank account rate is deregulated at this time when interest rates are on for a high, then the net interest margins of banks would suffer a big hit.

According to a bank economist, in case deregulation is started at this time, then it might lead to a price war amongst peer banks.

On the other hand, the All India Bank Depositors Association has said that a floor rate should be set for the savings account rate rather a ceiling.