BANKING AFFAIRS

Detailed explanation-1: -However, RBI regulates interest rates on savings bank accounts and the savings bank interest rate is currently fixed at 3.5% per annum, which is unchanged from March 1, 2003. A domestic rupee account may be opened as current, savings or term deposit.

Detailed explanation-2: -Reserve Bank of India-Database. As a part of financial sector reforms, the Reserve Bank has deregulated interest rates on deposits, other than savings bank deposits. The interest rate on savings bank deposits has remained unchanged at 3.5 per cent per annum since March 1, 2003.

Detailed explanation-3: -At a basic economic level, the interest rate set on savings account deposits is determined by the relationship between how much banks value receiving extra deposits and how much savers value the services of a savings account.

Detailed explanation-4: -The MPC determines the policy repo rate required to achieve the inflation target. The MPC is required to meet at least four times in a year.

Detailed explanation-5: -In its first monetary policy decision after the Union Budget 2023, the Reserve Bank of India (RBI) has hiked the repo rate by 25 basis points. This is good news for fixed deposit investors as soon banks will start passing on the benefits to the customers in terms of hike in deposit rates.