Govt. says no change to senior citizen FD rates

The government refutes the claims on any changes to the special interest scheme for senior citizens’ fixed deposits while assuring the scheme would continue with the prevailed interest rate up to now.

In a media release yesterday, the Finance, Economy and Policy Development Ministry said that the claims on the removal of the subsidised interest rate scheme for senior citizens’ fixed deposits were baseless. 

In late 2014, the previous government introduced a 15 percent special interest scheme for fixed deposits up to Rs.1 million (later increased to Rs.1.5 million), maintained by the senior citizens over the age of 60 years.

The government currently subsidises the difference between the 15 percent and market standard interest rate offered by commercial banks.

With the recent measures by the Central Bank (CB), which were aimed at bringing down the lending rates and boosting credit to the COVID-19-hit private sector, the fix deposit rates offered by commercial banks have come down below 8 percent, from the double digits, compared to several months ago. 

The inflation slightly decreased to 5.2 percent YoY in May, from 5.9 in April, as per the National Consumer Price Index (NCPI). However, it still remains at a slightly higher level, compared to the first half of last year. 

The reduction in deposit interest rates has created panic among citizens, particularly the pensioners, who rely on the interest income from their deposits as the main source of income.