Impact of Falling Interest Rates on Middle-Class Savings
The Maharashtra Congress criticizes reduced lending rates for harming the middle class, as lower deposit interest rates affect depositors, particularly retirees. The Congress calls on the RBI and the government to protect depositors. Despite intentions to boost the economy, reduced rates erode the financial security of depositors.
- Country:
- India
The Maharashtra Congress has raised concerns over the reduction in lending rates by banks, warning that it could harm middle-class savers by slashing interest rates on deposits. Party officials stressed the need for the Reserve Bank of India (RBI) and the central government to offer protection to these citizens.
Vishwas Utagi, a state Congress leader with a background in banking, criticized the RBI's aggressive reduction of the repo rate from 6 percent to 5.5 percent. While this move aims to spur economic growth, it poses a threat to the financial security of common depositors, particularly retirees, due to reduced deposit returns.
Utagi highlighted that, despite the goal to increase credit availability and economic activity, falling deposit interest rates diminish the purchasing power of depositors. He called for immediate action to protect these individuals, questioning why large defaulters receive priority over honest depositors.
(With inputs from agencies.)
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- interest rates
- deposits
- middle class
- RBI
- repo rate
- Congress
- Vishwas Utagi
- economy
- growth
- banking
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