IBA Moots 100 Bps Cut In Savings Rate

Mumbai, January 27: | Updated: Jan 28 2003, 05:30am hrs
Indian Banks Association (IBA) has once again proposed to the Centre for a reduction of savings bank account rate by at least 100 basis points (one percentage point) to three per cent considering the the downward trend in the domestic interest rate scenario.

"IBA has once again requested the Centre for a one per cent reduction in the savings bank rate by at least one percentage point," Union Bank of India CMD V Leeladhar told presspersons after signing an agreement with DSP Merrill Lynch Mutual Fund for distribution of their products on Monday. Mr Leeladhar is also the vice-chairman of IBA.

Though he was not ready to say that the downward trend in deposit rates would continue, Mr Leeladhar responded to a query only to say: "Union Bank will not change the rates for a few days". Mr Leeladhar said the bank has decided to distribute DSPML Mutual Funds products, eight in all, as part of a strategy to increase fee-based income and offer the banks clients a bouquet of products. He said, "In additon to bank deposits, clients look for alternative investment opportunities which are safe, liquid, offer good returns, tax-effective and provide capital appreciation. Mutual funds have products which help investors meet these objectives."

DSPML Mutual Fund chairman Hemendra Kothari said, "MFs are becoming a preferred option for investors and we are planning to reach more clients through banks."