ET Bureau Sep 21, 2013, 06.32AM IST
(Deposit growth has been…)
MUMBAI: Central bank to launch saving products to attract investor away from gold & realty.
The Reserve Bank is working on two savings products where returns will be linked to consumer price inflation, a move aimed at weaning retail investors away from gold and real estate. One of the products will pay a lump sum amount at the end of the maturity period based on annual consumer prices, similar to fixed deposits that have always been attractive to retail investors.
"We have started the process to issue two kinds of retail inflation-indexed retail certificates— one with lump sum payment at the end and the other with indexed interest payments," RBI governor Rajan told reporters after his first monetary policy review on Friday.
Rajan had hinted at such a move immediately after taking charge as RBI chief on September 4. "Households have expressed a desire to be protected against CPI inflation," he had told reporters. "Together with the government, we will issue Inflation Indexed Savings Certificates linked to the CPI New Index to retail investors by end-November 2013."
Saugata Bhattacharya, chief India economist at Axis Bank, said, "Apart from an hedge against inflation, it will help address the cash flow needs of diverse investors or savers."Deposit growth has been slowing for some months now. Annual deposit growth, even as of early September, is 13.37%, lower than the RBI's comfort level of 14% for the year.
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