The Reserve Bank of India has recently brought up a discussion paper regarding deregulation of savings bank interest rates. Addressing his views on the same, Chairman of the largest lender of the country, State Bank of India, Mr Pratip Chaudhuri said that if deregulation sets in, atleast a part of the Rs 9 lakh crore people save with themselves would get circulated in the economy.
He said that the savings rate prevailing at present that is at 3.5% does not actually allure people to invest in the same.
However he said that with deregulation, a disadvantage which may set in is differential treatment done by the same bank in urban and rural areas. That is while a bank may offer high rate of interest in urban areas to attract more of the urban folk, it may offer low rates of interest in the rural areas.
Speaking about the merger of SBI and its associates, he said, "The merger is not going to happen in a day or two. Steps would be taken only next year."