Blog

The RBI’s  final guidelines on base rate will ensure that existing home loan borrowers get the full benefit of any reduction in interest rates. While it is too complex to understand how the base rate will be determined, the essence seems to be that the banks cannot discriminate between old borrowers and new ones. This will [...]

Bonanza year 2009 ended on a happy note and would be remembered for many reasons. Indian stock markets recovered remarkably from their March 2009 lows and went on to register the best year-to-date (YTD) performance in the history of Indian stock market since 1991, with more than 80 per cent return in 2009 and above [...]

India’s domestic economy has started showing some signs of revival which is evident from the encouraging numbers that are received from different quarters. On the other hand, the global economic outlook is still not very clear. In this situation, the Reserve Bank of India (RBI) is forced to initiate some precautionary steps on account of abundant liquidity, inflationary pressures and weak credit off-take. As a result, the RBI has announced exit from its expansionary policy and has taken out some of the liquidity windows offered to the ailing sectors during the global crisis.

Retail banking in India has undergone a sea change in the last two decades. The change is visible everywhere, right from operations to products. However, the real benefits of a new thing are realised only when it is utilised completely. For example, in retail banking, savings accounts hold a special place as customers use them for their day-to-day transactions like salary transfer, loan repayment, electronic clearing services (ECS) payments. But these accounts offer a very little interest on savings, i.e., 3.5 per cent! On the other hand, a traditional fixed deposit carries an interest rate of 7 to 8 per cent.

Rajiv, a ICICI Bank customer, received a call from the bank executive informing him about ‘Advantage Deposit’ – a new product with dual benefits of a fixed deposit and a mutual fund. Now, Rajiv’s curiosity is roused as he has invested consistently into various fixed deposit schemes. But he is not gung ho about its [...]