Committee headed by dy. Governor, RBI set-up for Comprehensive Review of National Small Savings Fund
As a follow-up to one of the recommendations of the 13th Finance Commission, the Government has set-up a committee headed by Deputy Governor, Reserve Bank of India for comprehensive review of National Small Savings Fund (NSSF) structure, interest rate, tenor and other administrative matters. The terms of reference of the Committee include, inter alia, review of the existing parameters for the small saving schemes, terms of lending to States and other related issues.
The small savings schemes continue to enjoy investor confidence as the risk-return equation of these schemes is favourable with the benefits of liquidity, accessibility, tax incentives and implicit sovereign guarantee.
Interest rates relating to banks, financial institutions and debt markets are deregulated. Banks have been given freedom by Reserve Bank of India to fix their own interest rates on domestic term deposits of various maturities. Interest rates on Small Savings Schemes are Administered Interest Rates and are benchmarked to the average annual yield on Government Securities of comparable maturity in the secondary market, with a suitable spread subject to a maximum of 50 basis point over the benchmark yield, depending upon the maturity and liquidity of the instruments.
This information was given by the Minister of State for Finance Sh. Namo Narain Meena in a written reply to an Unstarred Question raised in Rajya Sabha today.