Search the Internet          Tips  Sites: Finance, Investment

Banks may set cut-off age at 60 for seniors' scheme

K Ram Kumar

The cut-off age for the senior citizens' deposit scheme is likely to be pegged at 60 years by the public sector banks. These banks, which control over 80 per cent of aggregate deposits in the banking system, held preliminary talks to arrive at a consensus on the age factor.

As per the initial deliberations, majority of the public sector banks are agreeable to the eligibility criteria of 60 years for availing of the special fixed deposits schemes by senior citizens.

Most of the public sector banks are expected to offer anywhere between 25 to 50 basis points higher interest rate on these special fixed deposits than the prevailing rates on normal deposits, in line with the maturity period.

The move towards a standard definition for senior citizens' is aimed at preventing banks from cannibalising each others' deposits.

The strong possibility of fixing the minimum age limit of 60 follows the fact that many salaried-class people retire by that time and look for a safe haven for parking their terminal (superannuation) benefits, a senior bank official said.

"Most of the senior citizens have no source of income and depend solely on their accumulated savings. With investments in stock markets, mutual funds and fixed deposits of corporate not exactly ensuring the safety of their earnings, it is but appropriate that such a scheme should be thought of," he said.

The Reserve Bank of India, in its monetary and credit policy for 2001-02, heeded the persistent demands of the senior citizens and permitted banks to offer higher interest rates on their deposits.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report