Business Daily from THE HINDU group of publications
Wednesday, Aug 02, 2006

Cross Currency

Group Sites

Home Page - Small Savings
Money & Banking - Interest Rates
Industry & Economy - Social Security
No increase in small savings, PF rates: Chidambaram

Our Bureau

New Delhi , Aug. 1

The Finance Minister, Mr P. Chidambaram, on Tuesday ruled out any increase in the interest rate on small savings, employees provident fund and pension fund.

The Minister said in the Rajya Sabha that there was no proposal to raise interest on small savings and provident fund.

The Finance Minister's view comes in the wake of the interest rate hike effected by the Reserve Bank of India last week. The central bank had increased its benchmark interest rate by a quarter percentage point to 6 per cent, a four-year high.

The Central Government had cut interest rate on small savings to 8 per cent in 2003 and has not revised it since. In January, the Government had cut the rate on the Employees Provident Fund , the country's biggest pension fund, to 8.5 per cent for the current fiscal as against 9.5 per cent last fiscal.

Budget worries

Stating that the Government was working to rein in the Budget deficit, the Minister said that this year's deficit was wider because of higher expenditure on roads, ports and other infrastructure. During the first three months ended June 30, the deficit had reached 52.3 per cent of the year's target.

Mr Chidambaram also said that Indian banks were facing restrictions in opening new branches in the US. "US Federal Reserve follows a rather restrictive policy in granting foreign banks permission for opening branches," he said.

The Finance Minister said the Government would continue to raise with the US authorities the need to give Indian banks more licences to open branches and said that reciprocity would be a consideration in dealing with this matter.

The Finance Minister said different countries have different regulations for allowing foreign banks to do business. These range from restricting the form of presence to discrimination in matters of capital adequacy and restrictions on dealings in foreign exchange.

Related Stories:
Case for deregulating S/B interest rates
Term deposits, small savings retain shine
Govt notifies 8.5% interest rate on EPF for '05-06

More Stories on : Small Savings | Interest Rates | Social Security

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

Contest Contest

PNB Readership Survey Contest

Stories in this Section
Orissa, Gujarat in for another wet spell

Delhi, Mumbai airports update gets into groove
Tariff panel recommendations could hit ONGC's revenues
Drug cos make plans to beat `generic' woes
Motorola, Tech Mahindra tie up to form CanvasM
Nasdaq raises listing standards for `Global Select Market'
`Tax exemption on FDs an investment opportunity'
No increase in small savings, PF rates: Chidambaram
Visaka Ind betting on textile boom
Binani Ind up on arm's strength
Home loan rates, PLR go up
Essar calls off BPL Mobile sale to Hutchison
USO fund: Finance Ministry faulted

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line