Improve rates for senior citizens as CSR initiative

There have been frequent reductions in deposit rates by banks in the recent past, so much so that this option is losing its meaning for the middle class. Recently, the interest rates were cut. Such low yield is disheartening and it is now tempting to look at the high-risk options with the hope of some decent yield. 

While it is understandable that this can be a fall out of merger of associate banks, one cannot dispute that these rates still do well compare with global rates, and also that it would eventually bring down lending rates too proportionately ,the fact remains that the middle class is left with less and less safe options to save. While equity debt instruments, mutual funds etc., are good options for high-yield, they do come with their own high risk factors. 

An investor also needs good knowledge of market conditions and should possess an instinctive alertness to gauge the trend. The middle class, which used to play it safe, can be a little more adventurous and explore these; but one should bear in mind the old saying, “Do not put all your eggs in one basket.” 

So, one should have a judicious spread of their savings. Bank deposits and post office savings would still top the list of safe options. Many investors say it is not fair on the part of banks to slash interest rates like this. 

Specially, for senior citizens category, and one cannot brush aside their sentiments, given that we have a high number falling into the ageing category. It would be good if State BI did an ABC analysis and the volume of senior citizens interest payment can be found out and if the percentage is very marginal. 

The confidence of senior citizens, who wish to play it safe and depend only on their pensions and interest should not be eroded. It is because of this ‘safe savings’ sentiment that they prefer to invest all the savings of their life time only in banks, and that sentiment should be respected. 

While one understands the economic reasons of leverage, profitability etc., there  is also a social responsibility? Many banks have invested heavily in Corporate Social Responsibility, without looking at the profit. The banks can boast of a number of progressive measures, such as different rates for farmers,, mahila etc  Banks should now look at brining the greying population under this ambit.