While the RBI deregulated interest rates on fixed deposit schemes in 1997, it continues to fix the rate on savings deposits. Presently, banks pay interest at the rate of 3.5% on saving accounts, which was fixed in 2003
Mumbai: The Reserve Bank of India (RBI) today said that deregulation of the interest rates on savings banks accounts would benefit savers, as it would enable lenders to come out with innovative products to attract more funds from low income households, reports PTI.
"Deregulation will also allow banks to introduce product innovations which could also benefit the depositors," the RBI said in its draft discussion paper while inviting public comments on freeing the interest rate on savings accounts.
While the RBI deregulated interest rates on fixed deposit schemes in 1997, it continues to fix the rate on savings deposits. Presently, banks pay interest at the rate of 3.5% on saving accounts, which was fixed in 2003.
Giving the pros and cons of deregulation of savings account interest rates, the RBI paper also said the apprehensions that such a move would lead to "unhealthy" competition among the banks are unfounded.
Pointing out that the deregulation of fixed deposit rates 13 years did not result in unhealthy competition among the banks, "deregulation of savings deposit rate may also not result in any unhealthy competition," it said.
Moreover, the paper added that savings deposit interest rates cannot be regulated for all times to come when all other interest rates have already been deregulated, as it creates distortions in the system.
International experience suggests that in most countries, interest rates on savings bank accounts are set by the commercial banks based on market interest rates, it said.
Citing the fact that most countries in Asia experimented with interest rate deregulation, the paper said these resulted in positive real interest rates, which in turn contributed to an increase in financial savings.
Deregulation of the interest rate on savings deposits will make the rate flexible along with other interest rates, depending on the market conditions.
Since savings bank deposits in rural, semi-urban and urban areas are held largely for savings purposes, deregulation of interest rates is likely to enhance its attractiveness in these areas, it said.
The paper also noted that the flexibility will have another major advantage in that it will help improve monetary transmission. Since savings deposits constitute a significant portion of aggregate deposits, regulation of interest rates on such deposits has impeded the transmission of monetary policy impulses.
On the negative side, the deregulation could lead to an asset-liability mismatch and could adversely affect small savers and pensioners.
The last date for sending suggestions and comments on this issue is 20th May.
The revision in benchmark prices will enable the manufacturers and importers to import fertilisers and fertiliser inputs and undertake domestic production and make fertilisers available to the farmers in 2011-12
New Delhi: The government today increased the benchmark prices of imported di-ammonium phosphate (DAP) and muriate of potash (MoP) fertilisers for the fiscal to ensure uninterrupted availability in the country during the coming kharif sowing season, reports PTI.
The decision was approved in a meeting of the Cabinet Committee on Economic Affairs (CCEA) here.
However, the CCEA also allowed fertiliser companies to raise retail prices of DAP by up to Rs600 per tonne from the existing rate of Rs10,750 per tonne.
The government reimburses subsidy on these two nutrients to fertiliser companies based on the benchmark price. The benchmark price has been increased to $612 per tonne for DAP and $420 per tonne for MoP from the current level of $580 per tonne and $390 per tonne, respectively.
The Group of Ministers (GoM) headed by finance minister Pranab Mukherjee had decided in February that the government will shoulder an additional fertiliser subsidy burden in the wake of rising global fertiliser prices.
India imports 6 million tonnes of DAP and 4 million tonnes of MoP every year.
“This (revision in benchmark prices) will enable the manufacturers and importers to import fertilisers and fertiliser inputs and undertake domestic production and make fertilisers available to the farmers in 2011-12,” an official statement said, adding that farmers would be able to buy fertilisers at subsidised rates at the maximum retail price (MRP).
The budgetary provision for phosphatic and potassic fertilisers for the 2011-12 fiscal is Rs33,500 crore.
However, the total subsidy outgo on potassium and phosphatic fertilisers for the ongoing fiscal will depend on the overall sale of the fertilisers, it added.
Experts warn that users of the Sony Playstation network should change all their passwords used for online banking, shopping and other such transactions, as well as cancel their credit cards, following the data theft by hackers into the network
Millions of users of Sony PlayStation who are under the risk of identity theft after hackers broke into the system and accessed personal data of videogame players, need to buckle up and change the passwords they use for online banking, shopping and other such transactions immediately as well as cancel their credit cards.
Sony, one of the world's largest consumer electronics manufacturers, has admitted that between 17th and 19th April, hackers broke into its system and accessed personal information of users of its online games. Following the hack, Sony has kept its online gaming services offline.
According to computer security firm Sophos, users should take immediate action to ensure that their online identities are secure, and that fraudsters cannot take advantage of stolen credit card information. "That means, changing your online passwords (especially if you use the same password on other sites), and considering whether it would be prudent to inform your bank that as far as you're concerned your credit card is now compromised," said Graham Cluley, senior technology consultant at Sophos.
"If you are a user of Sony's PlayStation Network, now isn't the time to sit back on your sofa and do nothing. The fraudsters will not wait around-for them this is a treasure trove ripe for exploiting. You need to act now to minimise the chances that your identity and bank account become casualties following this hack," he warned.
Sony has said that the hackers had been able to access a variety of personal information like name, address, country, email ID, date of birth, PlayStation network login ID and password and online IDs. In addition, Sony warned that profile information such as history of past purchases and billing addresses, as well as 'secret answers' given to Sony for password security may also have been obtained. Sony also admits that it cannot rule out the possibility that credit card information may also have been compromised.
"The fact that credit card details, used on the network to buy games, movies and music, may also have been stolen is very disturbing. If Sony loses your credit card information, it's no different from you losing your credit card-you should cancel that card immediately. Questions clearly have to be asked as to whether Sony was ignorant of PCI data security standards and storing this and other personal data in an unencrypted format. Overall, this is a PR and security disaster for Sony," Mr Cluley said.
Sony's PlayStation network service, which has more than 75 million registered accounts, operates in 59 countries and regions around the world.