| || |
| || |
An announcement could either be made coinciding with the budget or just after it, finance ministry officials said.
�We have been planning this for some time but have desisted till now because of pressure from state governments who do not seem to favour an interest rate cut. But now with the bank rate cut and the cascading impact of cuts in deposit rates by individual banks, we will have no option,� top finance ministry officials said.
Last year the ministry had slashed interest rates on post office savings, national savings certificates (NSCs) and public provident fund (PPF), collectively known as small savings schemes, from 12 per cent to 11 per cent. This had been done in consultations with state governments who had been protesting the high rate of interest the Centre was charging it on the money it onlends to them from these savings.
The small savings schemes are administered by the Centre but publicised by the states who are entitled to borrow up to 75 per cent of collections in their territories. The schemes are huge money spinners. In the last fiscal alone, more than Rs 29,000 crore was collected through these schemes, while in the previous year collections stood at Rs 21,000 crore.
These schemes are meant for small, poor and middle class investors and are generally accepted as an innovative way to prop up the savings rate in a developing country like India.
State governments have been objecting to possible cuts in small savings rate as they fear future flows into the kitty would be discouraged. Ministry officials say West Bengal finance minister Asim Dasgupta is now among those who oppose any further cut.
Dasgupta along with several other state finance ministers is willing to accept a cut only if a favourable differential still remains between small savings rate and deposit rates with banks.
| || |
| || |
SBI�s decision to pare the prime lending rate is likely to be followed up by other nationalised banks and private banks as well.
In fact, soon after RBI cut the bank rate and the cash reserve ratio yesterday, IndusInd Bank announced that its board would meet on February 22 to decide on a new lending rate structure.
Bank of Baroda has also gone on record saying that its board will meet early next week to review the situation and the Dena Bank board is meeting on February 23 for the same purpose.
Bankers are, however, intrigued by SBI�s decision not to touch deposit rates for the time being. �As a result, the already thinning spreads would get thinner,� an analyst tracking the bank said.
�We will review our deposit rates in due course,� SBI chairman Janki Ballabh told The Telegraph. �We will continue to improve our efficiencies to maintain our interest rate spreads.� However, Ballabh did not rule out the lowering of interest rates in the near future.
According to analysts, SBI has deferred a cut in deposit rates mainly because of the apprehension of flight in deposit base.
Bankers said that there would be a lot of resistance from both private and public sector banks to reduce their deposit rates because all of them are in fierce competition to mobilise deposits.
With the government small savings rate still remaining higher, banks would be risking a flight of funds if they cut deposit rates, they said.
However, few banks who are not comfortable with their liquidity position may wait till the announcement of the Union budget on February 28.
| || |
| || |
While fixing the performance bank guarantee at Rs 3 lakh for each licence, the government has also allowed existing voice mail/audiotex service licences to migrate to the new licensing regime with effect from April 1, communications minister Ram Vilas Paswan said in a statement here.
According to the guidelines issued by the communication ministry here, the service area for these licences has been defined as the short distance charging area (SDCA) on the basis of local dialling and the service would be accessible from outside the SDCA on STD call basis.
The government has further stated that voice mail and audiotex services can be provided as a value-added service by basic, cellular and cable service providers as access providers over their network, it said.
No separate licence fee would be charged for voice mail and audiotex services to be provided by these operators, it said adding that the revenue earned by these operators through their service will, however, be counted towards the revenue for the purpose of paying licence fee.
Under the guidelines issued today, any government or public service agency offering public utility services such as railways, broadcasting and news and media, has been permitted to provide audiotex services through interactive voice response systems without obtaining any licence, the statement added.
The licence for operation of voice mail and audiotex services in the country will be issued on �first-cum-first-served� basis, the statement said pegging the licensing period at 15 years, with provisions for a five-year extension.
The tariffs would be governed by Telecom Regulatory Authority of India (Trai), it said.