As wholesale and retail inflation rates come down, Reserve Bank of India like reserve banks around the world lower policy or benchmark interest rates. In India, fixed deposit rates are down from nearly 10% to below 8% for one or more years, and this clearly hurts savers and retired people living off these savings. On the other hand, borrowers from the government to those for car and house loans to small and large business borrowers also get lower rates and that helps build their business. The reverse was also true. In fact three and five year fixed deposit rates in the west are below 3% at best.
- 17 Jun 2016