Letters to the editor : Saving grace
The editorial (‘Floor for rate cut?’, Apr 22) argues that the government-fixed small savings interest rates are higher than what banks may be able to offer and hence, distort competition. Small savings schemes offer both safety and stability of income. We can hardly deny the consumer better services by pulling one down to the level of the other. The editorial bats for the industry at the cost of small investors. It cites underbanking, but it’s wrong to say that PSU banks have failed in this respect, as neither foreign banks nor new generation private banks have any rural penetration. Small savings is the best avenue the small investor can ever get. Withdrawal of tax benefits to interest earned, which diminishes the attractiveness of bank deposits, is a point validly made.
—G Gokul Kishore New Delhi