Deregulate saving bank interest rate: Assocham

New Delhi, Apr 10 (PTI) Industry body Assocham has said that deregulation of interest rates on saving accounts would increase competition among banks and benefit customers.

RBI recently announced that it will come out with a discussion paper on deregulation of interest rates on savings accounts.

Banks, at present, pay 3.5% on savings deposit.

Besides saving bank accounts, the RBI also monitors interest rates on non-resident Indian (NRI) deposits.

Assocham said that as the country pursues high growth strategy while braving pains of high inflation, a large savings community is  facing severe negative returns from bank deposits.

"Let there be a competitive environment where cost reduction determines the capability, and not regulated interest getting access to low-cost funds," it said.

It said that a substantial portion of Rs 53 lakh crore worth of deposits with Indian banks are in saving accounts.