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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.