12 % interest offer to senior citizens with restrictions
View(s):The recent budget offer of 12 per cent interest on deposits held by senior citizens, aged 60 years and over, in state banks is being restricted to a cap of Rs.1 million and strictly one account per person, bankers said.
The Central Bank (CB) has directed that applicants should make a declaration that they have one account that would be entitled to this above-market interest rate to prevent senior citizens from having multiple accounts and getting 12 per cent interest on all.
Several senior citizens said that the post-budget developments were very misleading as the proposal itself implied the 12 per cent interest rate was for any eligible person and no amount was stated. “Now they are imposing a limit, which means the first announcement was misleading,” one pensioner said.
Bankers said that no clear instructions have been issued as yet except for verbal directives on the Rs.1 million cap (limit) and one account per person. They said that based on past practice, senior citizens, who have several accounts that total less than Rs. 1 million, may be able to transfer them to one existing account or open a new, single account and apply for this interest rate on the cumulative amount.
Data shows that some 750,000 senior citizens hold accounts worth Rs. 750 billion in 33 banks.