AIBEA WANTS SAVINGS BANK RATE HIKED TO 5%

The capital position of public sector banks should not be shored up with World Bank loans and the interest rate on savings bank deposits should be increased to five per cent, according to the All-India Bank Employees Association (AIBEA).



These are among the 25 demands that the AIBEA has made in its pre-Budget memorandum to the Finance Minister.
Fearing that the $3-billion loan that the Government is seeking from World Bank for capitalising PSBs may come with conditions attached, the association said the Government was in a position to shore up the capital of these banks.
To encourage savings, it wanted the interest rate on savings bank (SB) deposits to be hiked to five per cent from the current 3.5 per cent.

On consolidation among PSBs, the association said given that large global banks went belly up in the recent global financial turmoil, the consolidation prescription in India was unwarranted and fraught with negative consequences. However, it suggested that regional rural banks (RRBs) should be merged with sponsor PSBs.

Source: http://www.thehindubusinessline.com/2010/02/25/stories/2010022550840600.htm