The most important news
headline today ( other than war related ) is “ RBI delivers
the cut that cheers”. As you
know, its regarding the repo rate cut by 25 bps ( ie, 0.25 %) now effected by
RBI . This is expected to a cut in the Bank interest rates by the same
extend. This is certainly good for the
overall economy and growth. That’s very fine indeed !
But who really benefits
from this interest rate reduction ?
The advantage is for the new borrowers. And definitely not for the existing borrowers
, as the banks do not extend the cuts to existing loan accounts, and they
retain the erstwhile base rates.
So, new borrowers get a sweet pill ! Earlier borrowers get a bitter pill !
And how about us, the pensioners ? Being a pensioner, it is most probable that
you have some Fixed Deposits in the Bank. You may be depending a lot on the
interest income on this. If it’s so for you, you get a very bitter pill ! The interest will get reduced immediately now
on ( Banks are
too smart to reduce deposit rates !) and your returns are down !
Now , do you know who cheers ? Its certainly not any cheer for the
pensioners.
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