Date:19/09/2005 URL: http://www.thehindubusinessline.com/2005/09/19/stories/2005091900060802.htm

Back Counting on deposits

That banks are likely to increase interest rates for deposits by senior citizens is welcome. However, deposit mobilisation campaigns do not seem to yield expected results.

One effective solution could be to change the rules relating to renewal of deposits. In order to avail themselves of the new interest rates, depositors should be required to close the existing deposit and refund part of interest received to the bank.

Where the deposits are re-invested with the same bank, banks could relax this rule. Another way to attract additional deposits would be to lower the age band for senior citizens from existing 60 to say 55.

V. K. Ramamoorthi

Chennai

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