In the rising interest rate scenario, banks are not in agreement to go in for deregulation of savings account rates. The reason they cite for the same is the fear of further increase in their costs following the deregulation.

Indian Banks' Association (IBA) had already opposed the suggestion. However it was again a topic of discussion during the post monetary policy review of bank heads with RBI.

Banks have said that they would be increasing service charges on facilities like use of ATMs and checks in case savings account rates finally get deregulated.

Also bankers hint that it is feared by large lenders that with new banks also coming into the playground along with deregulation taking place, the rate fight is most likely to intensify.