| The interest rates in India have been deregulated except for |
| 1. Saving deposits |
| 2. Non-Resident India deposits |
| 3. Small loans up to Rs. 2 lakh |
| 4. Export credits. |
A) 1, 2 and 3
B) 2, 3 and 4
C) 2 and 3
D) All the above
Correct Answer: B
Solution :
After the deregulation of Savings Bank Deposit Interest Rates, the Reserve Bank of India (RBI), announced deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposit rates and Ordinary Non-Resident (NRO) Savings Accounts (the interest rates on term deposits under Ordinary Non-Resident (NRO) Accounts are already deregulated). Accordingly, banks are now free to determine their interest rates on both savings deposits and term deposits of maturity of one year and above under Non-Resident (External) Rupee (NRE) Deposit accounts and savings deposits under Ordinary Non-Resident (NRO) Accounts with immediate effect. However, interest rates offered by banks on NRE and NRO deposits cannot be higher than those offered by them on comparable domestic rupee deposits. This has been done with a view to providing greater flexibility to banks in mobilising non- resident deposits and also in view of the prevailing market conditions.
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