Sitharaman says rate-cut on PPF and NSC was issued out of oversight, shall be withdrawan

Source :Sify
Author :Finance Desk
Last Updated: Thu, Apr 1st, 2021, 12:56:34hrs
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New Delhi: Union Finance Minister Nirmala Sitharaman has said that the latest decision on rate-cuts on savings deposits maintained with the Public Provident Fund and National Savings Scheme (NSC) was "issued by oversight". 

The Finance Minister was responding about an official memorandum issued by the Finance Ministry on Wednesday. This memo highlighted a drop in key savings rates, applicable from April 1 onwards. 

The Finance Minister tweeted"Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn."

The ministry is likely to continue with the interest-rates from FY 2020-21 for the new financial year and an announcement regarding this is expected soon. 

The now cancelled memo revised interest rates on Savings deposit from 4% to 3.5% whereas PPF rate was down from 7.1% to 6.4%. Interest on senior citizen savings schemes was down from 7.4% to 6.5% while one year term-deposits were revised to 4.4% from 5.5% previously. The interest rate on National Savings Certificates was cut from 6.8 per cent to 5.9 per cent, Sukanya Samridhi Yojana from 7.6 per cent to 6.9 per cent and Kisan Vikas Patra from 6.9 per cent to 6.2 per cent.

The Memo on Wednesday hampered the common man's aspirations. Congress leader Digvijay Singh said the decision to roll back the step was taken due to fear of alienating the small saver and common man with the state elections currently on. He sought a promise from the Finance Minister that it would not be implemented again once the elections are over.

With the financial year coming to an end, a rate-cut was perhaps the last thing, the Common Man would have thought. Meanwhile, here are some reactions from Twitter: 


* With inputs from agencies.

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