Finance Minister Arun Jaitley on Thursday defended the State Bank of India's decision to cut interest rate on saving accounts of less than Rs 1 crore, saying the move was in sync with reduction in lending rate.
Responding to a Zero Hour mention of the SBI's decision to cut interest rate on saving accounts with less than Rs 1 crore deposit to 3.5 per cent from 4 per cent, he said to protect the interests of senior citizens, the government has already floated a deposit scheme that guarantees 8-plus per cent interest rate. High interest rate on savings and fix deposits was during a time when inflation was 10-11 per cent and sluggishness was setting in the economy. So when the lending rate came down, so did savings account, Jaitley said.
He said for senior citizens and retired persons, the government has bought a pension scheme that guarantees 8 per cent interest rate.