Interest on current account
The country’s largest lender SBI is understood to have recommended RBI that banks pay an interest on current accounts. One would recollect that SBI chief had initiated intense debate on payment of interests on CRR. Today, in the context of changed milieu, the aspect of commercial viability has come into sharp focus and nothing is and can be offered for free. That is one side of it. From the viewpoint of customers, they are entitled to receive interest on current account just like any other deposits maintained. After all, it forms a useful raw material for banks to keep the wheels of business cycle rolling. The move will also help more flow of funds into the system for productive use. There is no reason why banks not pay interest on current account deposits. The proposal takes a balanced view and should be welcomed and, to start with, anything up to 2% appears perfectly justifiable.
Srinivasan Umashankar, Nagpur