Savings deposit rates can go down as well: Fitch's Bhoumik

Moneycontrol Bureau

The decision to free savings deposit rates by the Reserve Bank of India, brings cheer among depositors, who would now earn more interest on their idle money. However, there could be downward revision of savings rate as well, especially for accounts below Rs 1 lakh, says Ananda Bhoumik, senior director, Fitch Ratings. He added that that accounts with less than Rs ! lakh balance, are seen more of transaction accounts while accounts with more than Rs 1 lakh will be viewed as fixed deposits.

In the aftermath of RBI's latest policy rate hike by 25 basis points, according to Bhoumik, banks would pass on such rate hike to their customers based on their blend cost of deposits. Interest rates are near the peak of rate hike cycle, though high rate of inflation remains a key spanner if it continues next six months.

Click on the audio icon to listen to the full interaction with Ananda Bhoumik, senior director, Fitch Ratings.

saikat.das@network18online.com