Lok Sabha
According to the Reserve Bank of India (RBI) guidelines, banks are
required to charge interest rate on loans at monthly rest with effect
from April 1, 2002. Charging of interest on loans at monthly rests is,
however, not applicable to agricultural advances where, for the
convenience of borrower, interest rests are linked to crop seasons or
harvesting/marketing season. In the case of savings & term deposits,
Banks are required to pay interest at quarterly or longer rests. In the
case of savings deposits, at present, interest is calculated on minimum
balance to the credit of the deposit account during the period from the
10th to the last day of each calendar month and credited to the account
only when it is Rs.1/-or more.
On a review and in view of computerization in commercial bank branches,
it is proposed that payment of interest on savings bank accounts by
Scheduled Commercial Banks (SCBs) would be calculated on a daily
product basis with effect from April 1, 2010.
This information was given by Minister of State for Finance, Shri Namo
Narain Meena in written reply to a question raised in Lok Sabha today.
BSC/BY/GN-285/09