RPCD.No.RF.BC.38/07.38.01/2002-03 October 29, 2002
Kartika 07, 1924(Saka) All State/Central Co-operative Banks Dear Sir, You are aware that Scheduled Commercial Banks are not allowed to pay interest on current accounts maintained with them. Banks sponsoring RRBs, however, have been given the discretion to pay interest on current account at mutually agreed rate for RRBs sponsored by them. In a similar way, Co-operative Banks (Urban/Central/State) are permitted to offer at their discretion, interest rate not exceeding half per cent per annum on current accounts. 2. In order to remove the anomalies on account of the discretionary provisions which generally add to increase in the cost of deposits to the banks, the following measures are suggested for implementation by State and Central Co-operative Banks as early as possible. - The banks are encouraged not to pay any additional interest on savings bank accounts over and above what is payable by commercial banks.
- The banks are encouraged not to pay interest on current accounts.
3. Please bring the contents of this circular to the notice of the Board of your bank. 4. Please acknowledge receipt to our Regional Office. Yours faithfully, Sd/- (Vani J. Sharma)
Chief General Manager |