Interest Rate in Banks

Banks are financial institutions doing the trade of interest with the money received from the public. It accepts deposits from depositors (creditors) and grants loans and advances out of the same deposits to those (borrowers or debtors) who need them. The banks allow interest on the deposits and also charge interest on the loans and advances. But the rate of interest charged on the loans and advances is much higher than the rate of interest allowed on the term deposits. And this difference between the two is the profit earned by banks from its trade of interest run by public money. This profit is one of the major sources of government’s earning invested in different projects and infrastructure development of the country.

At present the rate of interest allowed on term deposits in banks in India is 5 per cent per annum being exceptionally very low and nominal. Such rate of interest was never earlier allowed to the depositors against their term deposits by any successive governments prior to the BJP Government led by Narendra Modi in India. In fact, it transpires the abysmal economic scenario under his governance.

When the rate of interest exceptionally goes down, it weighs down the spirit of people to invest their hard-earned money in banks in its term deposit scheme. Consequently the banks cannot procure sufficient funds to run its trade of interest resulting in its failure to make  targeted profit. Whenever it happens in a country, its government fails to take up new projects and employment generation scheme owing to dearth of funds needed for socio-economic growth of a nation. Under this circumstance, the government is compelled to impose new taxes, excise duties and GST on all items and even sells public properties so as to procure funds necessary for financing in projects and creating employment opportunities. And it finally results in exorbitant price-hike of all goods and services including oil, LPG, medicines and treatments. Now the people of India are beset with these problems caused by the present government’s wrong economic policy. Will people be aware of it?

Muhammad Abdus Samad

Dhupdhara, Assam

Misuse Threat

Apropos the Election Amendment Bill 2021 which seeks to link Aadhaar details with the voter card to identify bogus voters, the argument does not hold good as votes are cast by citizens while Aadhaar is not proof of citizenship but of residence.

Moreover, Aadhaar is not free from wrong enrolment issues, so how would you identify bogus voters? It also fails the test of proportionality where not giving valid reasons for delinking Aadhaar details with voter ID card might lead to disenfranchisement. It would cause inconvenience to valid voters who are unable to present their Aadhaar details. The continuous threat of misuse of data is always there.

Such bills need more debate, not fast and furious enactment by mocking the legislative mechanism. There are other ways of ensuring fair elections with authentic votes using, for instance, block chain technology used in the elections of Sierra Leone in 2018.


Mukerian, Punjab

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